Reference no: EM132938145

The firm uses a calendar-year accounting period but prepares monthly adjustments. The balances at January 31 are as follows in the following Balance Sheet accounts:

Supplies $800, Prepaid Insurance $574, Wages Payable $500, Truck $8,700, and Accumulated Depreciation on Truck ($2,610). The following have been recorded for the Income Statement for the month ending January 31: Supplies Expense $960, Insurance Expense $82, and Wages Expense $3,200.

Problem a. If the amount in Supplies Expense represents the January 31 adjustment for the supplies used in January, and $620 worth of supplies were purchased during January, what was the January 1 beginning balance of Supplies?

Problem b. The amount in the Insurance Expense account represents the adjustment made at January 31 for January insurance expense. If the original insurance premium was for one year, what was the amount of the premium and on what date did the insurance policy start?

Problem c. If the truck has a useful life of five years, what is the monthly amount of depreciation expense and how many months has Fields owned the truck?