Posted: August 28th, 2016
necessary entries to journalize these transactions for the month of February.
On February 28, Jones takes the following facts into account:
I. Feb. 28, 20×1. The supplies account had a balance of $910 on Feb. 1, 20×1. Some supplies were used during the month. Jones determines that the original cost of the remaining supplies is $260.
j. Jones accrues an additional $30 in wages for the hours that Dave worked on Monday, February 28, 20×1; Dave’s wage for that pay period is scheduled for payment on Friday, March 4, 20×1.
k. Feb. 28, 20×1. Jones considers the prepayment made for advertising services on Feb. 2, 20×1, and makes an entry to account for advertising expense for the month of February, 20×1.
l. Feb. 28, 20×1. Interest of $1220 has accrued on the note payable. The interest is scheduled for payment early in March.
Using an accounting worksheet, Jones prepares a trial balance before making adjustments. Compute the worksheet,
showing the adjustments, and compute the ending (adjusted) balance amounts. Label each adjustment in parenthesis (i) – (l).
Prepare an income statement, a statement of owners’ equity, and a balance sheet for Jake’s Computer Repair Service for the months ended February 28, 20x!. Use the adjusted trial balance amounts you computed in Requirement 3, and the template below.
Jones recognizes utilities expense as soon as the utilities bill arrives, and recognizes service revenues only when the related service is performed (refer back to transaction c and e in Requirement (4). Which basis of accounting is Jones correctly applying?
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