Give the adjusting entry required for each transaction at December 31, 2008.


Question Description:

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Recording the adjusting entries Fergi Catering Company is at its accounting year-end, December 31, 2008. The following data that must be considered were developed from the company”s recorded and related documents: During 2008, office supplies amounting to $996 were purchased for cash and debited in full to supplies. At the beginning of 2008, the count of supplies on hand was $290 and, at December 31, 2008 was $332. On December 31, 2008, the company catered an evening gala for a local celebrity. The $6,225 bill was payable by the end of January 2009. No cash has been collected, and no journal entry has been made for this transaction. On December 31, 2008, repairs on one of the company delivery vans were completed at a cost estimate of $500; the amounts is not yet paid or recorded. The repair shop will bill Fergi”s Catering at the beginning of January 2009. On October 1, 2008, a one year insurance premium on equipment in the amount of $996 was paid and debited in full to prepaid insurance on that date. Coverage began in November 1. In November 2008, Fergi”s signed a lease for a new retail location, providing a down payment of $1,740 for the first three months” rent that was debited in full to prepaid rent. The lease began on December 1, 2008. On July 1, 2008, the company Purchased new refrigerated display counters at a cash cost of $15,000. Depreciation of $1,300 has not been recorded for 2008. On November 1, 2008, the company loaned $3,320 to one of its employees on a one year, 12 percent note. The principle plus interest is payable by the employees at the end of 12 months. The income before any of the adjustments or income taxes was $18,600. The company”s federal income tax rate is 30 percent. Compute adjusted income based on (a) through (g) to determine income tax expense. Required: 1. Indicated whether each transaction relates t a deferred revenue, deferred expense, accrued revenue or accrued expense. 2. Give the adjusting entry required for each transaction at December 31, 2008.

Answer

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