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December 20, 2014

Homework Help: Accounting

Posted by Mickey on Monday, March 21, 2011 at 2:33pm.

E3-5 Drew Carey Company has the following balances in selected accounts on December 31,2008.
Accounts Receivable $ -0-
Accumulated Depreciation—Equipment -0-
Equipment 7,000
Interest Payable -0-
Notes Payable 10,000
Prepaid Insurance 2,100
Salaries Payable -0-
Supplies 2,450
Unearned Consulting Revenue 40,000
All the accounts have normal balances.The information below has been gathered at December 31, 2008.
1. Drew Carey Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2008.
2. A count of supplies on December 31, 2008, indicates that supplies of $800 are on hand.
3. Depreciation on the equipment for 2008 is $1,000.
4. Drew Carey Company paid $2,100 for 12 months of insurance coverage on June 1, 2008.
5. On December 1, 2008, Drew Carey collected $40,000 for consulting services to be performed
from December 1, 2008, through March 31, 2009.
6. Drew Carey performed consulting services for a client in December 2008. The client will be
billed $4,200.
7. Drew Carey Company pays its employees total salaries of $9,000 every Monday for the preceding
5-day week (Monday through Friday). On Monday, December 29, employees were
paid for the week ending December 26. All employees worked the last 3 days of 2008.
(SO 4)
Prepare adjusting entries from
selected data.
Instructions
Prepare adjusting entries for the seven items

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