Use the following information to answer the questions below. The balances listed below were taken from...

80.2K

Verified Solution

Question

Accounting

Use the following information to answer the questions below. Thebalances listed below were taken from the ABC Inc.’s unadjustedtrial balance on January 31st. The company’s reporting period beganon January 1st . Accounts Receivable $23,000 AccumulatedDepreciation 27,000 Accounts Payable 40,000 Cash 22,000 CommonStock 50,000 Equipment 72,000 Land 2,000 Long-term investment55,000 Prepaid Rent 18,000 Retained Earnings (Beginning) 56,000Salaries Expense 15,200 Service Revenue 42,200 Supplies 5,000Utilities Expense 3,000 In addition, assume the following: A. Thereare five salaried employees. Salaries are paid every Friday for thecurrent week. All past salaries have been paid. Two employeesreceive a salary of $700 per week and three employees earn $800 perweek. January 31st is a Tuesday. Employees do not work weekends.All employees worked the last 2 days of January. B. The prepaidrent account was created when the company signed and pre-paid for a12 month lease on October 1st of the prior year. On that date, thecompany paid the full rent for the following twelve months. C. Thebalance of supplies on hand on January 31st was $2,000. D. Thebalance of the equipment represents a single asset that has a costof 72,000 ($0 salvage value) and a useful life of 8 years. Thecompany uses straight-line depreciation.
a. Identify the impact on the accounting equation for anyrequired adjusting entries for the month of January.
b. Prepare a classified (identify current asset and liabilitiesseparately from long term) balance sheet after adjusting entries asof January 31st .

Answer & Explanation Solved by verified expert

3.6 Ratings (269 Votes)

a Accounting Equation Adjusting Journal entries Debit Credit Assets Liabilities Stockholders Equity A Salaries expense 2171 2171 2171 Salaries payable 2171 270074380074 B Rent expense 2000 2000 2000 Prepaid rent 2000 180009 mths 1 mth C Supplies expense 3000 3000 3000 Supplies 3000 50002000 D Depreciation expense 750 750 750 Accumulated Depreciation 750 See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

Use the following information to answer the questions below. Thebalances listed below were taken from the ABC Inc.’s unadjustedtrial balance on January 31st. The company’s reporting period beganon January 1st . Accounts Receivable $23,000 AccumulatedDepreciation 27,000 Accounts Payable 40,000 Cash 22,000 CommonStock 50,000 Equipment 72,000 Land 2,000 Long-term investment55,000 Prepaid Rent 18,000 Retained Earnings (Beginning) 56,000Salaries Expense 15,200 Service Revenue 42,200 Supplies 5,000Utilities Expense 3,000 In addition, assume the following: A. Thereare five salaried employees. Salaries are paid every Friday for thecurrent week. All past salaries have been paid. Two employeesreceive a salary of $700 per week and three employees earn $800 perweek. January 31st is a Tuesday. Employees do not work weekends.All employees worked the last 2 days of January. B. The prepaidrent account was created when the company signed and pre-paid for a12 month lease on October 1st of the prior year. On that date, thecompany paid the full rent for the following twelve months. C. Thebalance of supplies on hand on January 31st was $2,000. D. Thebalance of the equipment represents a single asset that has a costof 72,000 ($0 salvage value) and a useful life of 8 years. Thecompany uses straight-line depreciation.a. Identify the impact on the accounting equation for anyrequired adjusting entries for the month of January.b. Prepare a classified (identify current asset and liabilitiesseparately from long term) balance sheet after adjusting entries asof January 31st .