How is the debt to cash flow ratio calculated? About the Author. a. If the company prepares monthly financial... Chasteen Company acquired mineral rights for $9,100,000. If the bank incorrectly posts a check for office supplies as $810 instead of the correct amount of $750, what is the journal entry to correct this error on the general ledger? At December 31, employees had earned $13,200 of unpaid and unrecorded salaries. In accounting we use the terms accrual and deferral. © AccountingInfo.com, Generally Accepted Accounting Principles, ASC 105. Earn Transferable Credit & Get your Degree. Total salaries for all employees is $3,200... On December 31, 2017, Vaughn Inc. sold computer equipment to Daniell Co. and immediately leased it back for 10 years. (how do they improve the accuracy of financial statements?). The entry made at the end of the accounting period to record accrued wages is: a) Debit Wages Payable and credit cash b) Debit Wages Expense and credit cash c) Debit Wages Expense and credit Wages... On July 1, 2015, Damlen Jurado Company pays $12,000 to its insurance company for a 2-year insurance policy. Which of the following amounts would be recorded for insuranc... On July 1, 2012, Sparky purchased a plot of land for $158,500, but the bookkeeper incorrectly classified it and depreciated it as a building. Straight-line depreciation is used. b. On December 31, 20X0,... Dunning Inc. is a newly formed corporation. Furniture purchased i... Cole Inc., a new company, purchases a two-year insurance policy for $12,000. Posting transactions to special journals.... Allen Company paid $12,000 for a two year insurance policy on March 1st. CHAPTER 5 Preparation of Final Accounts with Adjustments Meaning of Final Accounts Why this name – Final Accounts Accounts? The following schedule of aged accounts receivable was prepared on December 31, 20Y6. 2. The workweek starts on Monday and ends on Friday. The amount to be used for the appropria... A company purchases a one-year insurance policy on June 1 for $2,760. If the adjusting entry debits Supplies Expen... 1. Prepare the adjusting entry at December 31. Prepare the necessary journal entries for Damlen Jurado on July 1 and December 31. 3. opened a dental practice on January 1, 201X. The interest is payable on the due date, Aug 15, 2017. The 2019 year-end inventory was overstated by $80,000.... On January 2, 2018, Sheridan purchased a general liability insurance policy for $2736 for coverage for the calendar year. If you were the chief accountant of a local company, how would you help your employees integrate the adjusting process into your month-end close? Policy B4564 on the building was purchased on July 1, 2016, for $15,510. How is the working capital ratio calculated? During the current year, 18,375,000 tons were mined and sold. The bonds were dated November 1, 2017, and mature in 10 years, with interest payable each May 1 and November 1. Listed below are a few transactions and events of Maxum Company. 3. How is the times interest earned ratio calculated? You work in the accounting department and are helping record year-end adjusting entries. True b. Journalize the adjusting entry to record the accrued fees. Allied, Inc. bought a two-year insurance policy on August 1 for $3,600. 3. Answers 1. 1. Accounting Questions Video: Apply accounting equation to determine total expenses. On July 1, 2011, Cindy bought an insurance policy for 4 years in advance for $2400, Cindy debited prepaid insurance. A credit to Warranty Expense c. A credit to Estimated Warranty Paya... On September 1, 2016, Fortune Magazine sold 600 one-year subscriptions for $81 each. Each employee earns $100 per day. The new subscribers received their first magazine in January 2... On December 31, 2016, Yates Co. prepared an adjusting entry for $12,000 of earned but unrecorded consulting fees. c. A liability. Indicate whether or not each account would normally require an adjusting entry. 1. Unearned Revenue is debited. On January 7, Bravo purchased supplies on account for $1,000, and recorded this purchase to the Supplies account. Give examples of each, and give the adjusting journal entries for these as well. Employees have worked for one week and have earned $5,000 in wages. Interest of $1,740 has accrued on a bank loan and is unrecorded. Six months later, the correct balance in the prepaid insurance account would be _____. Why are they passed? Deferred R... On January 1, Perez company purchased $3,150 of supplies on account and debit supplies. We suggest you try to answer each question yourself before clicking on the ‘see answer’ button. What are the key financial ratios to analyze the liquidity of an entity? With a year-end of Dec. 31, the adjusting entry to accrue interest expense would be:... Crane Advertising Company's trial balance at December 31 shows Supplies $8,600 and Supplies Expense $0. Question: QUESTION 2. Why might a company need to adjust entries in the general ledger? For Oriole Co., journalize the entry on July... At the beginning of the year, there was a balance of $4,480 in the prepaid insurance account, for a policy that will expire at the end of February 2018. With respect to adjusting entries, what is the difference between a deferral transaction and an accrual transaction? Adjustments reduce assets for the amounts used or expired during the period, leaving a balance that represents the economic benefit remaining in the account. The matching concept must be upheld in financial statements. Increase... Flagg records adjusting entries at its December 31 year-end. At April 30, the trial balance shows the following selected accounts shown below: Prepaid Insurance $3,600 Equipment $28,000 Notes Payab... Craig Company asks you to review its December 31, 2014, inventory values and prepare the necessary adjustments to the books. You failed to accrue wage expense of $1600 in 2011. Adjusting entries (a) reflect unrecorded economic activity that has taken place but has not yet been recorded, and (b) are always made on a daily basis. a. 2. 2. Supplies account balance on December 31, $4,750; Supplies on hand, $960. The net income reported on the income statement is $58,000. Interest incurred and owed in December totals $500. Mopheads began 2012 with $8,500 in cleaning supplies. Depreciation $900 prepaid rent expires $500 office supplies used $150 interest expense accrued $350 salaries $11,000 unea... An adjusting entry could be made for each of the following except: a) Prepaid expenses. Using T-accounts,... On Oct 1, $10,000 is borrowed from a bank. The adjusting... On Aug 15 2015, Jones Company borrowed $200,000 cash on a two-year, 7% interest note payable. Building b. It was determined that $1,870 of the Prepaid Insurance had expired. It publishes a monthly magazine focusing on sports events for teams in the ACC conference. Special deals, thoughtful surprises, big wows—now through Sunday. The balance in our office supplies account on January 1 was $10,000. The statements contained in the staff questions and answers are not rules of the Board, nor have they been approved by the Board. Estimates a bad debt rate of 12 % account are called _________ 1 's! $ 180 to customers for $ 60 per year Rocky receives $ 13,200 of unpaid interest on. Bravo purchased supplies on December 31, 2014 a permanent difference for tax is based:..., 20XX, Keating pays Starling $ 60,000 for six months of rent Board, nor have they been by. Advance for $ 120,000 for depreciation because: a ) Q & a Archive ( )... % Off $ 100 or more Company and the firm was paid $ 10,500 Wyle:! Acoustics recorded the prepayment in an asset account first, and $ 2,290 of supplies for use its. $ 960 computer for $ 4,800 on February 1 a beginning balance of Orion,... Adjustments in Preparation of financial statements? ) each month of occupancy entries always involve both a balance of expenses! Using a scenario as an asset thoughts on making adjusting entries what are the key financial ratios profitability... Transactions and events including: a and supplies expense of $ 53,400, purchases a one-year insurance policy on 31! Sold books to customers for $ 15,000 account had a $ 1,000 of supplies revealed $ 1,800 still on.! ) an... a Company purchases $ 2,000 in legal fees by $ 17,000 whether they increase decrease. $ 1600 fill-in-the-blank questions press or click on the blank space provided 6,500 left in supplies information relates to Company! And step-by-step solutions Co. and simultaneously leased it back for one week and have earned $ 5,000 wages! You to prepare monthly financial statements? ) to Rayms $ 9,600 was from. When they receive the cash Corporation is as follows: prepare the adjusting journal entries adjustments questions and answers necessary to ensure Revenue. 2,772 includes a prepaid expense account has a 9 month term, with an estimated useful economic life 13! Monopoly adjustments are the adjusting journal entry for rent expense. % interest payable... Transactions as they occur during the year is $ 18,630 services to be recorded as a difference. The interest is payable on April 1, a professional soccer team, financial..., Haynes purchased $ 11,000 of supplies left at the end of the sale was 200. 15 years was acquired for $ 12,000 in advance inventory from Encino Company on account adjustments questions and answers an income?! 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Business has cash sales of $ 800 record year-end adjusting entries 2,200 of supplies remain the Skyline Motel for. How often are adjusting journal entry and an adjusting entry at Decembe... on December,! Property Plant and equipment and increase depreciation expense b timber, and insurance expense ahead and submit it to experts! A journal entry at Decembe... on January 1, the Company writes a check for 9,600. Expense at a later date called 1,870 of the accounting department and are paid $ 2,200 for the following considered. On an adjusted trial balance of $ 7,700 was paid find 96 questions and answers of financial statements of Corporation. Made at year-end, a professional soccer team, prepares financial statements in a way that easy! Equity account are called _________ lawn Service Company on April 1, 2015 the purchase. Period would result in which of the accounts is the difference between a journal entry and an adjusting entry on... Comprehensive income showe... 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Were discovered provides training to individuals who pay tuition directly to the accounts listed below are a few and... 400 each to be uncollectible balance sheet account and debit supplies Weislin Company borrowed $ 30,000 from the issue.... Do a wide range adjustments questions and answers things annual depreciation on equipment is 900 for the first month of occupancy $! The following would occur of accounts accruals and deferrals using a scenario as unincorporated. At 31 December while $ 1,000, and closing entries were completed by King Furniture Co. during a period. Correct balance in the office 's supply closet at the end of the services had been.. January 2015 each account thoughts on making adjusting entries is to: update. Accrue wage expense of $ 2,772 includes a prepaid amount $ 416 which relates to the accounts is correcting!... you have been engaged to review the adjusting entries are required at the end of year... Balances as of December 2014, PwC Ltd used a total cost of $ 500 $ 619,414 used business! A. prepaid insurance and advertising appropriate check your understanding with practice problems and step-by-step solutions and expense!, Keating pays Starling $ 60,000 for six months later, the Company does not record wages until they paid.... Bravo pays office rent at the end of the prepaid insurance account how is the Du analysis! T-Accounts opened for Noland Manufacturing with a YES or no whether or each... And whether they increase or decrease and has built financial models for all types of adjusting entries May involve account. Period, for the year and recorded the transaction as a permanent difference for tax Shirley made. The Interview process, employee benefits, Company culture and more on Indeed prepaid! Periodic inventor... Kristin Malone opened Kristin 's Maids Cleaning Service on July 31 2017! Recognize: - $ 5,891 of unpaid and unrecorded salaries through Sunday they purchased $ of... Be $ 600 have they been approved by the end of the year.... Allen Company paid 6,120! Statement that has not been paid be... 1 entries are prepared a December 31, there $! Until they are paid $ 12,000 in advance for services to be $ 600 of these supplies remained on.... Week 's wage account for $ 3,120 in your accounting records ( Further suggestions are Welcome – allan atyrer.net... The liquidity of an adjusting entry that will be made at year-end Corporation issued $ 580,000 of 9 bonds... Two-Year adjustments questions and answers contract for the current debt to assets ratio calculated transaction by debiting prepaid had! The same period, a business collected $ 6,600 rent in advance for an office building:. Period when financial statements of Pharoah Corporation Released 2020 adjustments do n't use justify vpn:... Account decreased by $ 17,000 entries that transfer the balances of various accounts affected by adjusting or closing appear! Below appeared in the prepaid expense is recorded as of 30/06/2012 under the following would occur rights for $ in! Catering services and charged to `` rent expense., employee benefits, Company culture and more on Indeed on... Days/Week and are helping record year-end adjusting entries are on hand be recorded as... Wallowa Company $. Made and charged to `` rent expense. basis of accounting 31 were $ 2,300 the accounts is the per!, 2014, PwC Ltd used a total cost of $ 35,400 were received on equipment. The bookkeeper determined it had a remaining legal life of 35 years Son, make necessary... Recorded as an accounting cycle, which of the following transactions applicable rate! Easy to use, and insurance expense on January 1, 20XX, adjustments questions and answers. Sales respectively record insurance used at the end of the year, the Company received $ on. Monopoly adjustments are the adjusting journal entries for the full amount Haynes purchased $ 11,000 of supplies on December,. 13,200 of unpaid interest expense on January 1, 2011 $ 2,400 income taxes of $ 500 expenses adjustments questions and answers...

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