50.1K

Verified Solution

Link Copied!

Please help me with question E-4-12

THANK YOU!!

Agency sullaujusieu uld Uddice al Jure JU, 2018 E4-12. Adjusting Journal Entries; T-accounts. Fanatical Fashions, a department store, has the following unadjusted account balances as of December 31, 2018, the company's year-end: Cash: $3,230,000 Accounts Receivable: $1,240,000 Prepaid Insurance: $252,000 Prepaid Rent: $480,000 Buildings: $3,540,300 Accumulated Depreciation Buildings: $360,000 Accounts Payable: $980,000 Wages Payable: $420,000 Note Payable: $360,000 Common Stock: $1,000,000 Sales Revenue: $7,450,300 Wage Expense: $1,120,000 Utilities Expense: $94.000 Insurance Expense: $120,000 Interest Expense: $234,000 Rent Expense: $260,000 Depreciation ExpenseBuildings: $0 At year-end, Fanatical Fashions makes necessary adjusting journal entries to properly record revenues and expenses for the year. The following information applies to the adjusting journal entries: The prepaid insurance balance relates to a two-year insurance policy purchased in June that covers the period of July 1, 2018, to June 30, 2020. The prepaid rent balance relates to rent that was paid in January to cover the company's facilities for the current year. Wages for the year in the amount of $236,000 will be paid after year-end and have not yet been recorded. Fanatical purchased the buildings in the beginning of the year and depreciates on a yearly basis. It must record a full year of depreciation at the end of 2018. The buildings have no residual value, a 30-year estimated useful life, and will be depreciated on a straight-line basis. Fanatical has not yet recorded interest expense for 2018 on the note payable in the amount of $16,000. Prepare the journal entries necessary to record the adjustments at year-end. Omit explanations

Answer & Explanation Solved by verified expert

See Answer