A physical count of supplies on hand on december 31 2008

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Reference no: EM13482269

A partial trial balance of Julie Hartsack Corporation is as follows on December 31,2008.

Dr. Cr.

Supplies on hand $ 2,700

Accrued salaries and wages $1,500

Interest receivable on investments5,100

Prepaid insurance 90,000

Unearned rent -0-

Accrued interest payable 15,000

Additional adjusting data:

1. A physical count of supplies on hand on December 31, 2008, totaled $1,100.

2. Throughoversight, the Accrued Salaries and Wages account was not changedduring 2008. Accrued salaries and wages on December 31, 2008,amounted to $4,400.

3. The InterestReceivable on Investments account was also left unchanged during2008. Accrued interest on investments amounts to $4,350 onDecember 31, 2008.

4. The unexpiredportions of the insurance policies totaled $65,000 as of December31, 2008.

5. $28,000 wasreceived on January 1, 2008 for the rent of a building for both2008 and 2009. The entire amount was credited to rental income.

6. Depreciationfor the year was erroneously recorded as $5,000 rather than thecorrect figure of $50,000.

7. A furtherreview of depreciation calculations of prior years revealed thatdepreciation of $7,200 was not recorded. It was decided that thisoversight should be corrected by a prior period adjustment.

Instructions:

(a) Assuming thatthe books have not been closed, what are the adjusting entriesnecessary at December 31, 2008? (Ignore income taxconsiderations.)

(b) Assuming thatthe books have been closed, what are the adjusting entriesnecessary at December 31, 2008? (Ignore income tax considerations.)

Reference no: EM13482269

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