90.2K

Verified Solution

Link Copied!

1. A partial trial balance of ABC Corporation is as follows on December 31, 2021.

Dr. Cr.

Supplies $2,700

Salaries and wages payable $1,500

Interest receivable 5,100

Prepaid insurance 90,000

Unearned Rent -0-

Interest payable 15,000

Additional adjusting data:

1. A physical count of supplies on hand on December 31, 2021, totaled $1,100.
2. Through oversight, the Salaries and Wages Payable account was not changed during 2021. Accrued salaries and wages on December 31, 2021, amounted to $4,400.
3. The Interest Receivable account was also left unchanged during 2021. Accrued interest on investments amounts to $4,350 on December 31, 2021.
4. The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2021.
5. $28,000 was received on January 1, 2021, for the rent of a building for both 2021 and 2022. The entire amount was credited to rent revenue.
6. Depreciation on equipment for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000.
7. A further review of depreciation calculations of prior years revealed that equipment depreciation of $7,200 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment.

Requirement:

Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2021? (Ignore income tax considerations.)

Answer & Explanation Solved by verified expert

See Answer