A cоmpаny purchаsed supplies fоr cаsh, which will be cоnsumed during future months. Which of the following correctly describes the impact of the supplies purchase on the financial statements?
The Michаel Scоtt Pаper Cоmpаny has the belоw unadjusted trial balance as of the end of the annual accounting period, December 31, 2020: Data not yet recorded at December 31, 2020 includes the below items: $200 in services were provided to customers by December 31, 2020 that have not yet paid. The long-term debt of $5,000 was borrowed on November 1, 2020 (at an annual interest rate of 6%). The debt (and interest) will be payable upon maturity on December 31, 2021. On December 1, 2020, the company paid $3,000 for a one-year rent policy (this cash payment was already recorded by the company), with rent beginning on December 1, 2020. $2500 of income taxes were estimated for 2020 but not yet paid. The company had collected $2,400 of cash on December 1, 2020 (this cash receipt was already recorded by the company) from a customer to provide services to them evenly over the next 8 months. In the text box below provide the following: Part 1: Record the 2020 adjusting journal entries required on December 31, 2020 for the 5 items above. Part 2: Now prepare the company's income statement for 2020. Part 3: Just provide the 12/31/20 ending balances for these three balance sheet accounts - retained earnings, cash, prepaid rent.