Q3TI
Question
Startech Surveillance Services had the following adjustments as of the end of the year:
a. Equipment depreciation was \(1,500.
b. \)700 of advertising expense was incurred but not paid. (Use Advertising Payable.)
c. Office Supplies on hand at the end of the year totaled \(250. The beginning balance of Office Supplies was \)600.
d. \(1,200 of rent revenue was earned but not recorded or received.
e. Unearned revenue of \)3,000 had been earned.
6. For each situation, indicate which category of adjustment (deferral or accrual) is described.
7. Journalize the adjusting entry needed.
Step-by-Step Solution
VerifiedEquipment depreciation and office supplies are deferral and the rest are Accrual.
Transaction | Adjustment type |
|
|
a) | Deferred expense |
b) | Accrued expense |
c) | Deferred expense |
d) | Accrued revenue |
e) | Accrued revenue |
Date | Particular | Debit | Credit |
|
|
|
|
a) | Depreciation expense – Equipment | $ 900 |
|
| Accumulated depreciation - Equipment |
| $ 900 |
| Being depreciation incurred |
|
|
|
|
|
|
b) | Advertising Expense | 700 |
|
| Accrued Expense |
| 700 |
| Being office supplies used |
|
|
|
|
|
|
c) | Supplies expense | 350 |
|
| Office Supplies |
| 350 |
| Being supplies expense incurred |
|
|
|
|
|
|
d) | Accounts receivables | 1,200 |
|
| Net revenue |
| 1,200 |
| Being revenue earned but not received |
|
|
|
|
|
|
e) | Unearned revenue | $3,000 |
|
| Service revenue |
| $3,000 |
| Being unearned revenue earned |
|
|