Reference no: EM132623792

Question - The financial year for Drip Dry Cleaning Services ends on 30 June. Using the following information, make the necessary adjusting entries at year-end. Ignore GST.

1. On 15 February, Danielle Drip's business borrowed $17,600 from Northern Bank at 6% interest. The principal and interest are payable on 15 August.

2. Rent of $3,960 for the 6-month period ending 31 July is due to be paid in August.

3. The annual depreciation on equipment is estimated to be $7,920. The 1 July balance in the Accumulated Depreciation account was $17,160.

4. Drip Dry Cleaning Services purchased a 1-year insurance policy on 1 March of the current year for $730. A 3-year policy was purchased on 1 November of the previous year for $2,970. Both purchases were recorded by debiting Prepaid Insurance.

5. The business has 2 part-time employees who each earn $240 a day. They both worked the last 3 days in June for which they have not yet been paid.

6. On 1 June, the Highup Hotel paid the business $2,310 in advance for doing their dry cleaning for the next 3 months. This was recorded by a credit to Unearned Dry Cleaning Revenue.

7. Water for June of $940 is unpaid and unrecorded.8.The supplies account had a $310 debit balance on 1 July. Supplies of $1,720 were purchase during the year and $210 of supplies are on hand as at 30 June.