The following are several transactions of Ardery Company

that occurred #2404

The following are several transactions of Ardery Company that occurred during the current year
and were recorded in permanent (that is, balance sheet) accounts unless indicated
otherwise:Date TransactionApr. 1 Purchased a delivery van for $10,000, paying $1,000 down,
and issuing a 1-year, 12% note payable for the $9,000 balance. It is estimated that the van has
a 4-year life and an $800 residual value; the company uses straight-line depreciation. The
interest on the note will be paid on the maturity date.May 15 Purchased $830 of office
supplies.June 2 Purchased a 2-year comprehensive insurance policy for $960.Aug. 1 Received
6 months’ rent in advance at $260 per month and recorded the $1,560 receipt as Rent
Revenue.Sept. 15 Advanced $600 to sales personnel to cover their future travel costs.Nov. 1
Accepted a $6,000, 6-month, 12% (annual rate) note receivable from a customer, the interest to
be collected when the note is collected.The following information also is available:1. On January
1, the Office Supplies account had a $250 balance. On December 31, an inventory count
showed $190 of office supplies on hand.2. The weekly (5-day) payroll of Ardery Company
amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day
accrual is required for the current year.3. Sales personnel travel cost reports indicate that $490
of advances had been used to pay travel expenses.4. The income tax rate is 30% on current
income and is payable in the first quarter of next year. The pretax income before the adjusting
entries is $8,655.Required:On the basis of the above information, prepare journal entries to
record whatever adjustments are necessary to bring the accounts up to date on December 31.
Each journal entry explanation should show any related computations.View Solution:
The following are several transactions of Ardery Company that occurred

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