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Reinforcement Problems, continued

LG 4-2.  Do the adjustment and verify new account balances:

1.

Calculate the Amount of the Adjustment Make the Journal Entry   Cost per month:   $1,750/5 = $350/per service call   Amount used up:   $350 × 3 mo. = $1,050 June       30 Repairs Expense 1,050     Prepaid Repairs   1,050      A ↓ =     L     + OE ↓      Prepaid   Repairs      Repairs   Expense      −1,050   +1,050

Determine the New Balances of the Accounts Affected      Prepaid Repairs     1,750             1,050     700                Repairs Expense   −0−         1,050         1,050

2.
Calculate the Amount of the Adjustment Make the Journal Entry Spare parts cost on trial balance: $14,550 Actual spare parts on hand cost: $1,500  Spare parts used up: $13,050 Parts Expense 13,050   Spare Parts   13,050      A ↓ =     L     + OE ↓      Spare   Parts      Parts   Expense      −13,050   +13,050
Determine the New Balances of the Accounts Affected      Spare Parts     14,550             13,050     1,500                Parts Expense   −0−         13,050         13,050

Learning Goal 4: Prepare Adjusting Entries for Prepaid Expenses

S3

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