Reference no: EM132641024

Question - Boot Camp Co. (BCC) is about to close its December 31, 2020 financial year-end. Following are the preliminary amounts or situations in the accounts described.

Required - For each situation, provide the adjusting entry(ies) required, if any, to properly record the events and reflect the correct accounts. (Round to the nearest dollar.)

1. BCC makes numerous purchases of office supplies throughout the year and charges the supplies expense account. The purchases throughout 2020 totaled $145,000. A physical inventory of the supplies at year-end determined a balance on hand of $15,000. The balance reported at the beginning of the year (January 1, 2020) as supplies on the balance sheet was $8,500 and this account has not been adjusted all year since all purchases were expensed as incurred.

2. BCC has a balance in its prepaid insurance account at the beginning of 2020 of $2,000 which has not been adjusted. This policy expired on May 31, 2020. The renewal policy, with a premium of $16,200 extended for 3 years and, upon renewal, this payment was charged to the insurance expense account.

3. BCC has a balance in its prepaid insurance account at the beginning of 2020 of $2,000 which has not been adjusted. This policy expired on May 31, 2020. The renewal policy, with a premium of $16,200 extended for 3 years and, upon renewal, this payment was charged to the insurance expense account.

4. BCC received an advance payment on December 31, 2020 of $25,000 on a custom order and the accountant credited the deferred (unearned) contract revenues account upon receipt of the payment.