Read Each of the Following Transactions for Enterprises Security Systems

question 20

Essay

Read each of the following transactions for Enterprises Security Systems. Determine the accounts and amounts to be debited and credited in the necessary end-of-July adjustments.
A. On July 1, 2013, Enterprises Security Systems, a new firm, bought supplies for $2,300. The $2,300 was debited to the Supplies account. An inventory of supplies at the end of June showed that supplies costing $900 were on hand.
B. On July 1, 2013, the firm bought equipment costing $24,000. The equipment has an expected useful life of 10 years and no salvage value. The firm will use the straight-line method of depreciation.
C. On July 1, 2013, the firm paid $4,500 rent in advance for a nine-month period. The $4,500 was debited to the Prepaid Rent account.

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Definitions:

Business Environment

The combination of internal and external factors that influence a company's operating situation.

Plant Construction Costs

refer to the expenses incurred in building a new manufacturing facility, including materials, labor, site development, and equipment.

Capacity Expansion

Capacity expansion is the process of increasing the production capability of a facility to meet expected demand increases.

Truckload

A freight mode where a truck is filled to capacity with goods from a single shipper, optimizing transportation efficiency.