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Fes Company is making adjusting journal entrles for the year ended December In developing information for the
adjusting journal entries, you lea med the following:
a A twoyear insurance premium of $ was pald on January for coverage beginning on that date. As of
December the unadjusted balances were $ for Prepald Insurance and $ for Insurance Expense.
b At December you obtained the following data relating to supplies.
Unaujjusted balance in Supplies on December
Unadjusted balance in Supplies Gxpense on December
$
Supplies on hand, counted on Deqember
Required:
Of the $ pald for insurance, what amount should be reported on the income statement as insurance Expense? What
amount should be reported on the December balance sheet as Prepald Insurance?
What amount should be reported on the income statement as Supplies Expense? What amount should be reported on the
December balance sheet as Supplies?
Indicate the accounting equation effects of the adjustment required for
a Insurance and
b supplies.
If a transaction affects a temporary account, Include the account name under "Temporary Accounts" and the financlal effect under
NI Do not enter an amount under "Stockholders' Equity" for these transactions; their Impact on stockholders' equity will occur later
when the temporary accounts are closed at yearend. Do not enter No Effect NE or zero for any cells without an effect for each
transaction despite what may be shown in textbook demonstration cases as these cells should be left blank.
Complete this question by entering your answers in the tabs below.
Required
Required
Required
Of the $ paid for insurance, what amount should be reported on the income statement as Insurance Expense?
What amount should be reported on the December balance sheet as Prepaid Insurance?
