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Prepare adjusting journal entries as needed for the following items

Prepare adjusting journal entries, as needed, for the following items.

(a) The Supplies account shows a balance of $500, but a count of supplies reveals only $200 on hand at year-end.

(b) The company initially records the payments of all insurance premiums as prepaid insurance. The unadjusted trial balance at year-end shows a balance of $500 in Prepaid Insurance. A review of insurance policies reveals that $100 of insurance is unexpired.

(c) Employees work Monday through Friday, and salaries of $2,500 per week are paid each Friday. The company’s year-end falls on Tuesday.

(d) At year-end, the company received a utility bill for December’s electricity usage of $200 that will be paid in early January.

 

 

169. The adjusted trial balance for China Tea Company at December 31, 2015, is presented below:

 

 

Debit

Credit

Cash

$  11,000

 

Accounts Receivable

150,000

 

Prepaid Rent

5,000

 

Supplies

25,000

 

Equipment

300,000

 

Accumulated Depreciation

 

$135,000

Accounts Payable

 

20,000

Salaries Payable

 

4,000

Interest Payable

 

1,000

Notes Payable (due in two years)

 

30,000

Common Stock

 

200,000

Retained Earnings

 

50,000

Dividends

20,000

 

Service Revenue

 

400,000

Salaries Expense

180,000

 

Advertising Expense

70,000

 

Rent Expense

15,000

 

Depreciation Expense

30,000

 

Interest Expense

2,000

 

Utilities Expense

    32,000

_______

Totals

$840,000

$840,000


Prepare an income statement for China Tea Company for the year ended December 31, 2015:

Jan 27 2020 View more View Less

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