Journalize the Necessary Year-End Adjusting Entries Based on the Following

question 61

Essay

Journalize the necessary year-end adjusting entries based on the following account balances before adjustments.
a.
The inventory of supplies on hand at December 31, 20--, was $230.
b.
The 4-month insurance premium of $1,800 was purchased on December 1, 20--.
c.
The $34,000 of equipment was purchased on January 1, two years ago. It has a salvage value of $2,000. Straight-line depreciation was used to compute depreciation at the end of last year.
d.
Wages accrued at December 31, 20--, were $3,700.

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Definitions:

Conversion Costs

The combined costs of direct labor and manufacturing overheads involved in transforming raw materials into finished goods.

Direct Labor

The wages paid to workers who are directly involved in the production of goods or services.

Manufacturing Overhead

Factory overhead expenses that arise during the production process of a product.

Accounts Receivable

The money owed to a business by its customers for goods or services that have been delivered but not yet paid for.