Read the Description of Following Adjustments That Are Required at the End

question 39

Essay

Read the description of following adjustments that are required at the end of the accounting period for Hubbard Repair Services. Determine the account and amount to be debited and the account and amount to be credited.
A. Prepaid rent for the year on April 1, 2013. Rent expired during the month of April 2013, $3,500. Record the adjustment on April 30, 2013.
B. Purchased supplies for $2,000 on April 1, 2013. Inventory of supplies was $1,600 on April 30, 2013. Record the adjustment for the amount of the supplies that were used during the month of April 2013.
C. Depreciation is computed using the straight-line method. Equipment purchased on April 1, 2013, for $18,000 has an estimated useful life of 5 years with no salvage value. Record the adjustment on April 30, 2013.
D. Signed a 6-month contract for $2,400 of prepaid advertising on April 1, 2013. Record the adjustment for the amount of the contract that expired during the month of April 2013.

---

Definitions:

Price Elasticity Of Demand

A measure of how much the quantity demanded of a good responds to a change in its price, indicating its sensitivity.

Marginal Cost

The additional cost incurred from producing one more unit of a good or service.

Profit-Maximizing Seller

An economic agent whose primary objective is to achieve the highest possible profit from their sales.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, used to evaluate the trade-offs in resource allocation.