Answer Happy

ba 7. 3. 6. 2. 3. 4. 5. Problem 1: Ellis Company uses the following accounts and numbers. 10 Cash 19 Accumulated Depreciation 11 Accounts Receivable 20 Accounts Payable 14 Supplies 52 Rent Expense. 53 Depreciation Expense 54 Interest Expense 21 Unearned Service Revenue 22 Salaries Payable Notes Payable 16 Prepaid Rent 24 Interest Payable 33 Common Stock 40 Service Revenue 50 Salaries Expense 51 Insurance Expense 18 Equipment 23 55 Utilities Expense 56 Supplies Expense Ellis Co. adjusts annually. The following relates to their December 31 adjustments. 1. On 12/1, Ellis received $6,000 in advance for future services to be performed. At 12/31, $4,000 remains unearned. 2. Salaries of $650 are unpaid at 12/31. 3. Prepaid Rent had a $2,000 normal balance prior to adjustment. As of 12/31, $800 was unexpired. 4. The 12/31 balance in Supplies is $2,500. A 12/31 inventory of supplies shows $1,500 has been used. 5. Revenue earned but not recorded totals $1,750 at 12/31. 6. Incurred utility expenses of $200 are unpaid and unrecorded at 12/31. 7. On 10/31 of the current year, Ellis borrowed $2,000 on a 6%, 3-month, note payable. 8. Equipment was purchased on 2/1 of the current year. It depreciates $7,500 per year. Instructions: For each of the above items indicate: 1. The type of adjustment (prepaid expense, depreciation, unearned revenue, accrued revenue, or accrued expense). 2. Use the account numbers from above to indicate which accounts should be debited and credited. Also, enter the appropriate dollar amount of the adjustment in the corresponding debit/credit columns. Show your work for any calculations made. Adjusting Entry Type of Adjustment Acct. Debit Credit 1. $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $