The management of The Social Bean Restaurant Inc., has elected to end its manual system as of

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Question:

The management of The Social Bean Restaurant Inc., has elected to end its manual system as of 30 November 2018. In December the restaurant is closed , except for two functions. Management feel that this is the ideal time to convert to an automated service. The business transactions that were posted for December, are incomplete, as the adjustments must still be posted.

The accountant of The Social Bean Restaurant requests you to do the following adjusting entries in the General Journal dated 31 December 2018, based on the information provided. Use the General Journal to complete the required adjustments: (20 marks )

2.1 Social Bean uses the perpetual inventory system. The issues from the storeroom total $780.

2.2 The food manager’s listing shows a $54 cost for employee meals. This will have the effect of reducing the cost of food sales expense.

2.3 Tower uses the asset method to record purchases of supplies. A listing of supplies drawn from the inventory is used to process this transaction. The supplies for Dec. Total $990.

2.4 On Dec.2, Tower purchased a $4,800 property & liability insurance policy and set up an asset account called prepaid insurance. This premium was for 12 months.

2.5 A new computer was bought and its depreciation amounted to $120 for the year.