Sandhill Construction Initially Records All Prepaid Expenses as Expenses and All

question 157

Essay

Sandhill Construction initially records all prepaid expenses as expenses and all unearned revenues as revenues. Given the following information, prepare the necessary adjusting entries at year end, December 31, 2019.
a)On January 3, 2019, $2,500 of supplies were purchased. A count revealed $300 still on hand at December 31, 2019.
b)On January 4, 2019, a $21,000 payment was made to an insurance agency for two and a half years of insurance.
c)On June 30, 2019, received nine months payment in advance from a customer, $16,200.
d)On August 1, 2019, received six months payment in advance from a customer, $9,600.

---

Definitions:

Brand-name Product

A product that is made by a well-known manufacturer and has the manufacturer's label on it.

Sales Promotion

Marketing strategies aimed at increasing sales or consumer interest in a product or service, often through deals, discounts, or special offers.

Product Placement

The practice of integrating specific products or brands into entertainment media, such as movies or TV shows, to increase visibility and awareness in a subtle manner.

Reese's Pieces

A brand of candy consisting of peanut butter filling enclosed in a hard candy shell, marketed by The Hershey Company.