Journalize the Adjusting Entries Needed on December 31, the End

question 77

Essay

Journalize the adjusting entries needed on December 31, the end of the current accounting period for Petra Industries using the following data:
A. The balance in Office Supplies before adjustment is $4,200. A physical count reveals $2,750 of supplies on hand at December 31.
B. A computer was purchased on January 1 for $12,000. The computer has a useful life of 3 years and is depreciated using the straight-line method.
C. A one-year insurance policy costing $5,400 was purchased on November 1.
D. Employee salaries are owed for 4 days of a regular 5 day work week. Weekly payroll is $13,600.
E. Unearned Maintenance Revenue has a balance of $21,000 before adjustment. Records show that $14,050 of that amount has been earned by December 31.

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Definitions:

Financing Costs

Expenses incurred by a company in the process of raising funds, including interest payments, fees, and other charges.

Incremental Working Capital

The additional amount of net working capital that a company needs to invest in a project.

Opportunity Cost

The value of the best alternative that is foregone when a particular course of action is chosen.

Incremental Cash Flow

is the additional cash flow generated by a company from a new project or investment, used to analyze the profitability of taking on the new project.