this exercise will test your ability to detect adjusting entries by comparing an adj 609797

This exercise will test your ability to detect adjusting entries by comparing an adjusted trial balance with an unadjusted trial balance.

The trial balance and the subsequent adjusted trial balance at December 31, 2014, for the Bradley Company appear below. The accounting period coincides with the calendar year.

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	Before Adjustment		After Adiustment
	nehit	Credit	nehit	Credit
Cash	$30,000		$30,000
Accounts Receivable	8,000		8,700
Note Receivable (8%)	10,000		10,000
Interest Receivable	0		200
Prepaid Rent	8,400		1,200
Prepaid Licenses	3,200		800
Office Supplies	2,000		300
Office Equipment	12.000		12.000
Accumulated Depreciation—Equipment		$3,000		$4,000
Accounts Payable		3,400		3,400
Unearned Service Fees		5.000		1.300
Salaries and Wages Payable		0		1.800
Common Stock		20,000		20,000
Retained Earnings		42,000		42,000
Dividends	36,000		36,000
Fees Earned		82,100		86,500
Interest Earned		0		200
Salaries and Wages Expense	45.900		47.700
Rent Expense	0		7,200
Licenses Expense	0		2,400
Office Supplies Expense	0		1,700
Depreciation Expense	0		1.000
	$155,500	$155,500	$159,200	$159,200

Instructions

Journalize the adjusting entries recorded on December 31, 2014.
Answer the following questions:
1. How many months was the note receivable outstanding during 2014?
2. If the rent is a constant amount each month, how many months rent is prepaid as of December 31, 2014?
3. How much is the monthly license fee assuming the monthly amount has remained unchanged during the whole year?
4. If the depreciation is a constant amount each year, for how many years has the office equipment been in use?
5. Assuming the balance of Salaries and Wages Payable at January 1, 2014 was $0, how much cash was paid to employees during 2014?