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:

Na+

Sodium ions, essential electrolytes in bodily fluids that play key roles in nerve impulse transmission and muscle contraction.

Extracellular Fluid

The fluid that exists outside the cells, providing a medium for the transport of substances and facilitating cellular interactions.

Intracellular Fluid

The fluid contained within the cells, making up about two-thirds of the total body water content and providing a medium for cellular processes.

Eminent Domain

The power of a government to take land for public use from private citizens for just compensation.