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On November 30, the end of the current fiscal year, the followinginformation is available to assist Allerton Company’s accountants inmaking adjusting entries:


  1. Allerton’s Supplies accountshows a beginning balance of . Purchases during the year were . Theend-of-year inventory reveals supplies on hand of .

  2. The Prepaid Insurance account shows the following on November 30:

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Beginning                                    $4720

              July 1                                          $4200

              October 1                                     $7272

The beginning balance represents the unexpired portion of aone-year policy purchased in September of the previous year. The July 1entry represents a new one-year policy, and the October 1 entryrepresents additional coverage in the form of a three-year policy.

Thefollowing table contains the cost and annual depreciation for buildingsand equipment, all of which Allerton purchased before the current year:

Account                 Cost                            Annual Depreciation

                               Building                 $298000                        $16000

                              Equipment              $374000                         $40000

  1. On October 1, the company completednegotiations with a client and accepted an advance of for services tobe performed monthly for a year. The was credited to Unearned ServicesRevenue.


  2. The company calculated that, as of November 30, it had earned on an contract that would be completed and billed in January.

  3. Amongthe liabilities of the company is a note payable in the amount of . OnNovember 30, the accrued interest on this note amounted to .

  4. On Saturday, December 2, the company, which is on a six-day workweek, will pay its regular employees their weekly wages of .

  5. OnNovember 29, the company completed negotiations and signed a contractto provide services to a new client at an annual rate of .


1. Prepare adjusting entries for each item listed above.

2. CONCEPT Explain how the conditions for revenue recognition are applied to transactions e and h.Get accounting assignment homework help today


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