A review of the ledger of Bellingham Company Ltd. at December 31, 2017, pro- duces the following data pertaining to the preparation of annual adjusting entries. 1. Salaries and Wages Payable £0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of £800 each per week, and three employees earn £500 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December. 2. Unearned Rent Revenue £324,000. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. III. Term Number of (in months) Monthly Rent Date Nov. 1 Leases 6 £4,000 Dec. 1 £8,500 4 3. Prepaid Advertising £15,600. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as follows. Number of Magazine Contract Date Amount Issues A650 May 1 £6,000 £9,600 12 B974 Oct. 1 24 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable £100,000. This balance consists of a note for 1 year at an annual interest rate of 9%, dated June 1.
A review of the ledger of Bellingham Company Ltd. at December 31, 2017, pro- duces the following data pertaining to the preparation of annual adjusting entries. 1. Salaries and Wages Payable £0. There are eight salaried employees. Salaries are paid every Friday for the current week. Five employees receive a salary of £800 each per week, and three employees earn £500 each per week. Assume December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December. 2. Unearned Rent Revenue £324,000. The company began subleasing office space in its new building on November 1. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease. III. Term Number of (in months) Monthly Rent Date Nov. 1 Leases 6 £4,000 Dec. 1 £8,500 4 3. Prepaid Advertising £15,600. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as follows. Number of Magazine Contract Date Amount Issues A650 May 1 £6,000 £9,600 12 B974 Oct. 1 24 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable £100,000. This balance consists of a note for 1 year at an annual interest rate of 9%, dated June 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A review of the ledger of Bellingham Company Ltd. at December 31, 2017, pro-
duces the following data pertaining to the preparation of annual adjusting entries.
1. Salaries and Wages Payable £0. There are eight salaried employees. Salaries are paid
every Friday for the current week. Five employees receive a salary of £800 each per
week, and three employees earn £500 each per week. Assume December 31 is a Tuesday.
Employees do not work weekends. All employees worked the last 2 days of December.
2. Unearned Rent Revenue £324,000. The company began subleasing office space in its
new building on November 1. At December 31, the company had the following rental
contracts that are paid in full for the entire term of the lease.
Ш.
Term
Number of
Date
(in months)
Monthly Rent
Leases
Nov. 1
£4,000
Dec. 1
£8,500
4
3. Prepaid Advertising £15,600. This balance consists of payments on two advertising
contracts. The contracts provide for monthly advertising in two trade magazines. The
terms of the contracts are as follows.
Number of
Magazine
Contract
Date
Amount
Issues
A650
May 1
£6,000
12
В974
Oct. 1
£9,600
24
The first advertisement runs in the month in which the contract is signed.
4. Notes Payable £100,000. This balance consists of a note for 1 year at an annual interest
rate of 9%, dated June 1.
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