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Accounting Concepts 101 (BMHM Group 1) ACC 1004 01 / Week 1 Exam Two Bam Tour Quiz navig
Accounting Concepts 101 (BMHM Group 1) ACC 1004 01 / Week 1 Exam Two Bam Tour Quiz navig . The unadjusted trial balance of Big Dog Carworks in includes the following account balances at December 31, 2015, fiscal year end. Assume ali accounts have normal debitor credit balances as applicable. • Prepaid Rent $3,600 • Equipment 24.000 • Unearned Advertising Revenue 1,000 Prepaid Insurance 900 Supplies Expense 600 • Wages Expense 15.000 1. One day of wages amounting to $1250 remains unpaid and unrecorded at Decemb 31, the amount witte included with the first Friday payment in January 2. The equipment was purchased December 1, it is expected to last 2 years with no residuale. No depression las yet been recorded The prepaid rent is for three month December 2013 January 2020 and February 2020 4. Hall of the uneared advertising has been eamed at December 31 5. The $900 balance in prepaid insurance is for a one-year policy, effective Sep 2013 none of the expense was recognized this year wet. Required. Prepare all necessary adjusting entrevat December 2019 Descriptions are not O a
Expert Solution
Adjusting entries at Dec.31, 2019
No. Accounts title Debit Credit
1. Wages expense $ 1,250
Wages payable $ 1,250
2. Depreciation expense(Equipment) $ 1,000
Accumulated depreciation $ 1,000
[( 24,000 - 0 ) / 2 ] / 12
3. Rent expense $ 1,200
Prepaid rent $ 1,200
( 3,600 / 3 months ) * 1 month
4. Unearned advertising revenue $ 500
Advertising/ Service revenue $ 500
( $ 1,000 / 2 )
5. Insurance expense $ 300
Prepaid insurance $ 300
( 900/ 12 months ) * 4 months
Deprciation per annum = ( Cost of asset - Residual value ) / life of asset
= (24,000 - 0 ) /2
= 12,000
12,000 is for 12 months ,then for Dec , Depreciation = 12,000 / 12
= $ 1,000
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