Question 3 Lulu Smart, owner of Fizzy Drinks employed you to prepare financial reports for the...

 

Transcribed Image Text:

Question 3 Lulu Smart, owner of Fizzy Drinks employed you to prepare financial reports for the year ending 30 June 2022. No adjusting entries have been made to the business accounts at any time during the year. An analysis of the business records reveals the following: 1 2 3 4 5 The business purchased office equipment on 1 January 2022 for $48,000. It was estimated to have a useful life of 10 years and a residual value at the end of that time of $4,000. At the beginning of the year, the business Unearned Revenue account had a Credit balance of $15,000. At the end of June, only $5,500 revenue has not been earned. The office supplies at the beginning of the year had a Debit Balance of $3,000. Office supplies of $450 were on hand at the end of June. Prepaid insurance purchased on 1 May for 9,000 represents premiums for 1 year. Prepaid Insurance expired was omitted. The wages are paid every Friday for a 5-day working week ending on the preceding Wednesday. In 2022, 30 June falls on a Thursday and the wages for the week ended 6 July 2022 amount to $8,000. There was no overtime and all employees worked the normal office hours during the 5-day week. Required: Prepare journal entries for the adjusting entries required on 30 June 2022. Show your calculations. Narrations are not required. (10 marks) Question 3 Lulu Smart, owner of Fizzy Drinks employed you to prepare financial reports for the year ending 30 June 2022. No adjusting entries have been made to the business accounts at any time during the year. An analysis of the business records reveals the following: 1 2 3 4 5 The business purchased office equipment on 1 January 2022 for $48,000. It was estimated to have a useful life of 10 years and a residual value at the end of that time of $4,000. At the beginning of the year, the business Unearned Revenue account had a Credit balance of $15,000. At the end of June, only $5,500 revenue has not been earned. The office supplies at the beginning of the year had a Debit Balance of $3,000. Office supplies of $450 were on hand at the end of June. Prepaid insurance purchased on 1 May for 9,000 represents premiums for 1 year. Prepaid Insurance expired was omitted. The wages are paid every Friday for a 5-day working week ending on the preceding Wednesday. In 2022, 30 June falls on a Thursday and the wages for the week ended 6 July 2022 amount to $8,000. There was no overtime and all employees worked the normal office hours during the 5-day week. Required: Prepare journal entries for the adjusting entries required on 30 June 2022. Show your calculations. Narrations are not required. (10 marks)

Answer rating: 100% (QA)

Adjusting Entries No 1 2 3 4 5 Date Jun 30 Jun 30 Jun 30 Jun 30 Jun 30 A... View the full answer