Read Each of the Following Transactions for Patel's Repair Services

question 46

Short Answer

Read each of the following transactions for Patel's Repair Services. Determine the accounts and amounts to be debited and credited in the necessary end-of-May adjustments.
A. On May 1, 2019, Patel's Repair Services, a new firm, paid $6,600 rent in advance for a six-month period. The $6,600 was debited to the Prepaid Rent account.
B. On May 1, 2019, the firm bought supplies for $2,000. The $2,000 was debited to the Supplies account. An inventory of supplies at the end of May showed that supplies costing $800 were on hand.
C. On May 1, 2019, the firm bought equipment costing $12,000. The equipment has an expected useful life of 10 years and no salvage value. The firm will use the straight-line method of depreciation.

Understand the warranties and liabilities of endorsers in the transfer of negotiable instruments.

Comprehend the concept of drafts, including sight drafts and bank drafts, and their use in commerce.

Appreciate the historical and modern uses of negotiable instruments in business transactions.

Recognize the legal outcomes of dishonored drafts and the implications of "without recourse" endorsements.

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Definitions:

Bequest

A transfer of personal property, often money or assets, through a will or estate plan to an individual or organization.

Ultimate Donation

A significant or final contribution made to a nonprofit or charitable organization, often made as part of a legacy or estate planning.

Advancement Services

A division within nonprofit and educational institutions focused on processing donations, managing donor databases, and supporting fundraising efforts.

Back-Office Operations

Back-office operations involve the administrative and support tasks in an organization that are not client-facing, such as human resources, accounting, and IT.