The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period.
The company paid $18,000 on October 1 of the current year to Vantage Property Management.
The payment was for 6 months’ rent of Sally Corporation’s headquarters, beginning on
Sally Corporation’s accounting year ends on December 31.
Analyze the five preceding cases individually and determine the following:
a. The type of adjusting entry needed at year-end (Use the following codes: A, adjustment of a prepaid expense; B,adjustment of an unearned revenue; C, adjustment to record an accrued expense; or D, adjustment to record anaccrued revenue.)
b. The year-end journal entry to adjust the accounts
c. The income statement impact of each adjustment (e.g., increases total revenues by $500)
4. Adjusting entries. You have been retained to examine the records of Mary’s Day Care Center as of December 31,
20X3, the close of the current reporting period. In the course of your examination, you discover the following:
On January 1, 20X3, the Supplies account had a balance of $1,350. During the year, $5,520 worth of supplies waspurchased, and a balance of $1,620 remained unused on December 31.
Unrecorded interest owed to the center totaled $275 as of December 31.