Prepare Adjusting Entries Dated December 31,2013,based on the Following Data

question 7

Essay

Prepare adjusting entries dated December 31,2013,based on the following data.
a.A two-year insurance policy costing $3,000 was purchased on October 31,2013.
b.Salaries owed to employees on December 31,2013,amount to $2,300.
c.The balance in Supplies before adjustment is $1,400.A physical count reveals $450 of supplies on hand on December 31,2013.
d.Depreciation on office equipment for the year is $1,869.
e.Unearned Service Revenue has a balance of $4,200 before adjustment.Records show that $2,725 of that amount has been earned by December 31,2013.

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Definitions:

Average Total Costs (ATC)

The total cost of production (fixed plus variable costs) divided by the total quantity of output produced.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales volume.

Manufacturing Firm

A business involved in the production of goods through the processing of raw materials and assembling of components into finished products.

Marginal Cost (MC)

The rise in overall expenses linked to the production of an extra unit of a product or service.