Read Each of the Following Transactions for Gallagher Enterprises

question 40

Essay

Read each of the following transactions for Gallagher Enterprises. Determine the accounts and amounts to be debited and credited in the necessary end-of-January adjustments.
A. On January 1, 2019, Gallagher Enterprises, a new firm, paid $4,800 rent in advance for a three-month period. The $4,800 was debited to the Prepaid Rent account.
B. On January 1, 2019, the firm bought supplies for $3,000. The $3,000 was debited to the Supplies account. An inventory of supplies at the end of January showed that supplies costing $1,300 were on hand.
C. On January 1, 2019, the firm bought equipment costing $15,000. The equipment has an expected useful life of 8 years and a salvage value of $1,560. The firm will use the straight-line method of depreciation.

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Definitions:

Lymphatic System

A network of vessels and organs that transport lymph and help in maintaining fluid balance and defending against infections.

Lymph Nodules

Small, localized clusters of dense tissue formed by lymphocytes and macrophages that play an important role in immune response.

Erythrocyte Production

The creation of red blood cells, a process primarily taking place in the bone marrow and regulated by various factors.

Connective Tissue

Tissue that supports, binds together, and protects organs, consisting of cells, fibers, and extracellular matrix.