Reference no: EM132971961

Question - The unadjusted trial balance of the Fashion First Company as of December 31, 2019 is found on the trial balance tab. The following information is required to prepare the necessary adjusting entries for the Fashion First Company.

1) The balance in Prepaid insurance represents a 24-month policy that went into effect on December 1, 2019. Review the unadjusted balance in Prepaid insurance, and determine the necessary adjusting entry, if any.

2) Based on a physical count, supplies on hand total $4,500. Review the unadjusted balance in Supplies, and determine the necessary adjusting entry, if any.

3) The equipment is expected to have a 5-year useful life, and be worth about $9,000 at the end of five years. Review the unadjusted balance in Accumulated depreciation, and determine the necessary adjusting entry to record the monthly depreciation, if any.

4) On December 26, the client paid a $8,400 60-day fee in advance, covering December 27 to February24. Review the unadjusted balance in Unearned Consulting Revenue, and determine the necessary adjusting entry, if any.

5) Fashion First's employee earns $110 per day for a five-day workweek beginning on Monday and ending on Friday. The employee was last paid on Friday, December 26. Review the unadjusted balance in Salaries expense, and determine the necessary adjusting entry, if any.

6) In the second week of December, Fashion First agreed to provide 30 days of consulting services to a local fitness club for a fixed fee of $3,660. The terms of the initial agreement call for Fashion First to provide services from December 12, 2019, through January 10, 2020, or 30 days of service. The club agrees to pay Fashion First $3,660 on January 10, 2020, when the service period is complete.

Review the unadjusted balance in Consulting revenue, and determine the necessary adjusting entry, if any.