Read the Description of Following Adjustments That Are Required at the End

question 66

Essay

Read the description of following adjustments that are required at the end of the accounting period for AAA Appliance Repair Services. Record the necessary adjusting entries required at the end of January on page 2 of a general journal. Omit the descriptions.
A. Prepaid rent for the year on January 1, 2019. Rent expired during the month of January 2019,
$2,000.
B. Purchased supplies for $7,600 on January 1, 2019. Inventory of supplies was $1,600 on January 31, 2019.
C. Depreciation is computed using the straight-line method. Equipment purchased on January 1, 2019, for $15,000 has an estimated useful life of 5 years with no salvage value.
D. Signed a 3-month contract for $600 of prepaid advertising on January 1, 2019.

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Definitions:

Deadweight Loss

A loss in economic efficiency that occurs when the equilibrium outcome is not achievable or is not achieved.

Elastic

A characteristic of a good or service that indicates its sensitivity to changes in price, with relatively large changes in quantity demanded or supplied in response to price changes.

Inelastic

Inelastic describes a situation where the demand or supply for a good or service is not significantly changed by variations in price.

Consumer Surplus

The difference between the maximum price a consumer is willing to pay for a good or service and the actual price they do pay.