The following amounts are taken from the unadjusted trial balance of Candy Cane Lighting at its year end, November 30, and are their normal balance (Debit or Credit). Candy Cane records all prepaid expenses and revenue in their respective expense or revenue accounts when paid or received. Candy Cane records adjusting entries annually when preparing its year end financial statements. The following transactions are included in the above account balances:
1. On November 1, through a $1,200 cheque, Candy Cane's bookkeeper paid both November and December rent and posted the full amount to Rent Expense
2. On November 15 supplies were purchased on account for $225. On November 30 a count of actual supplies on hand shows the remaining supplies to be $60.
3. On August 31 a customer paid $4,600 in advance for a service contract. As of November 30 $2,300 of the work was complete.
Instructions
a. Journalize the transactions described as (1) through (3). Include the date, but no explanation is required.
b. Prepare any adjusting entries required at November 30.
c. Determine the adjusted ending balances of the accounts listed above. Indicate whether the ending balance is a Debit or Credit.
d. Assuming that Profit before adjusting entries were made is $4,600, calculate the adjusted Profit.

Question

The following amounts are taken from the unadjusted trial balance of Candy Cane Lighting at its year end, November 30, and are their normal balance (Debit or Credit). Candy Cane records all prepaid expenses and revenue in their respective expense or revenue accounts when paid or received. Candy Cane records adjusting entries annually when preparing its year end financial statements.  The following transactions are included in the above account balances:
1. On November 1, through a $1,200 cheque, Candy Cane's bookkeeper paid both November and December rent and posted the full amount to Rent Expense
2. On November 15 supplies were purchased on account for $225. On November 30 a count of actual supplies on hand shows the remaining supplies to be $60.
3. On August 31 a customer paid $4,600 in advance for a service contract. As of November 30 $2,300 of the work was complete.
Instructions
a. Journalize the transactions described as (1) through (3). Include the date, but no explanation is required.
b. Prepare any adjusting entries required at November 30.
c. Determine the adjusted ending balances of the accounts listed above. Indicate whether the ending balance is a Debit or Credit.
d. Assuming that Profit before adjusting entries were made is $4,600, calculate the adjusted Profit.

Quizplus · Accepted Answer

The Answer of The following amounts are taken from the unadjusted trial balance of Candy Cane Lighting at its year end, November 30, and are their normal balance (Debit or Credit). Candy Cane records all prepaid expenses and revenue in their respective expense or revenue accounts when paid or received. Candy Cane records adjusting entries annually when preparing its year end financial statements.  The following transactions are included in the above account balances:
1. On November 1, through a $1,200 cheque, Candy Cane's bookkeeper paid both November and December rent and posted the full amount to Rent Expense
2. On November 15 supplies were purchased on account for $225. On November 30 a count of actual supplies on hand shows the remaining supplies to be $60.
3. On August 31 a customer paid $4,600 in advance for a service contract. As of November 30 $2,300 of the work was complete.
Instructions
a. Journalize the transactions described as (1) through (3). Include the date, but no explanation is required.
b. Prepare any adjusting entries required at November 30.
c. Determine the adjusted ending balances of the accounts listed above. Indicate whether the ending balance is a Debit or Credit.
d. Assuming that Profit before adjusting entries were made is $4,600, calculate the adjusted Profit.

The Following Amounts Are Taken from the Unadjusted Trial Balance