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Gnesinka
1 month ago
14

Roland Company began operations on December 1 and needs assistance in preparing December 31 financial statements, including its

year-end adjustments. The Tableau dashboard is provided to assist in the work.
Dec-1 prepaid 24 month insurance policy(coverage starting immediately) for $24,000 cash.
Dec-7 purchased supplies for $2,000 cash.
Dec-13 agreed to do $10,000 worth of work for Telo over the next 30.payment is to be received when the work is completed on Jan12.
Dec-24 received $4,000 cash in advance to perform work for ABX over the next four weeks.
Jan-5 paid wages of $800 cash to workers.
Jan-12 received $10,000 cash from Telo for work performed over the last 30 days.
Additional Information as of December 31
Telo Job Completion at Year-End: Telo 60% Complete
ABX Job Completion at Year-End:ABX 25% Complete
Supplies Remaining at Year-End
Wages Earned By Workers but not yet Paid at Year-End
1. Record the journal entries required for December, excluding the December 31 year-end adjusting entries.
2. Record the December 31 year-end adjusting entries for (a) prepaid insurance, (b) supplies, (c) accrued wages, (d) accrued revenue, and (e) unearned revenue.
3. Record the journal entries required for January.
Business
1 answer:
harina [3.6K]1 month ago
8 0

Answer:Incomplete Question, You left out the values for the following:

supplies left as of year-end: $700

Wages due to workers but unpaid at year-end: $500

Explanation:

1. To document the journal entries needed for December, excluding end-of-year adjustments for December 31.

Cash Outlay for prepaid insurance

Date          Account and Description    Debit         Credit

1st Dec  Prepaid Insurance                  $24,000

          Cash                                                           $24,000

Cash purchase of supplies

7th Dec    Supplies                              $2000

                 Cash                                                                 $2,000

13th Dec    No ENTRY      Roland Co agreed to perform but has yet to execute.

Advance payment received from ABX

24th Dec    Cash                                    $4,000

                  Unearned Revenue                              $4,000

2. To Complete the adjusting entries for December 31 for prepaid insurance, supplies, accrued wages, accrued revenue, and unearned revenue.

Insurance expense

Date          Account and Description    Debit         Credit

31st Dec  Insurance Expense                   $1,000

         Prepaid Expense                                                   $1,000

Calculation:A 24-month insurance policy costs $24,000.

Monthly insurance = 24,000/24= 1000

Supplies Expense

Date          Account and Description    Debit         Credit

31st Dec  Supplies Expense                    $1,300

                 Supplies                                                         $1,300

Calculation:Purchased supplies for $2,000 minus year-end remaining supplies of $700 = $1,300

Wages earned by employees but not yet compensated at year-end: $500

Date          Account and Description    Debit         Credit

31st Dec  Wages Expense                     $500

                  Wages Payable                                               $500

Service Revenue from Telo

Date          Account and Description    Debit         Credit

31st Dec  Accounts Receivable                 $6,000

                  Service Revenue                                         $6,000

Calculation=Job Completion at Year-End with cash received for the work done for Telo = 60% x 10,000 = $6,000

Service Revenue from ABX

Date          Account and Description    Debit         Credit

31st Dec  Unearned Revenue                 $1,000

                  Service Revenue                                               $1,000

Calculation:Job Completion at Year-End multiplied by the cash advance to perform the work = 25% x 4,000 = $1,000

3. Journal entry for January

Payment of wages recorded

Date          Account and Description    Debit         Credit

5 Jan  Wages Payable                          $500

  Wages Expense (800-500)             $300

                  Cash                                                         $800

Payments from Telo Documented

Date          Account and Description    Debit         Credit

12 Jan  Cash                                           $10,000             

       Accounts Receivable                              $6,000

      Service Revenue(10,000-6000)                  $4,000

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