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Laughter Landscaping has collected the following data for the December 31 adjusting cntrics: a. Each Friday, Laughter pays employees for the current week’s work. The amount of the weekly payroll is $8,000 for a five-day workweek. This year, December 31 falls on a Tuesday. Laughter will pay its employees on January 3. b. On January 1 of the current year, Laughter purchases an insurance policy that covers two years, $8,000.
Expert Answer
| 1 | Adjusting entries | ||
| a | Salaries and wages expense | 3200 | (8000*2/5) |
| Salaries and wages payable | 3200 | ||
| b | Insurance expense | 4000 | (8000*1/2) |
| Prepaid insurance | 4000 | ||
| c | Supplies expense | 8400 | (4300+5600-1500) |
| Office supplies | 8400 | ||
| d | Unearned revenue | 2600 | (6500*40%) |
| Service revenue | 2600 | ||
| e | Accounts receivable | 3000 | |
| Service revenue | 3000 | ||
| f | Depreciation expense | 5200 | |
| Accumulated depreciation-equipment | 3000 | ||
| Accumulated depreciation-trucks | 2200 | ||
| g | Interest expense | 250 | |
| Interest payable | 250 | ||
| 2 | |||
| a | Salaries and wages payable | 3200 | |
| Cash | 3200 | ||
| d | Unearned revenue | 3900 | (6500*60%) |
| Service revenue | 3900 | ||
| g | Interest payable | 250 | |
| Cash | 250 | ||
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Question & Answer: Laughter Landscaping has collected the following data for the December 31 adjusting cntrics: a. Each Friday, Laughter p…..
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