a. Depreciation on the company's equipment for the year is computed to be $14,000. b. The Prepaid Insurance account had a $8,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1,220 of unexpired insurance coverage remains. c. The Office Supplies account had a $390 debit balance at the beginning of December; and $2,680 of office supplies were purchased in December. The December 31 physical count showed $460 of supplies available. d. Two-thirds of the work related to $12,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,200 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of rental policies showed that $3,980 of rental coverage had expired. f. Wage expenses of $2,000 have been incurred but are not paid as of December 31. Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.

a. Depreciation on the company's equipment for the year is computed to be $14,000. b. The Prepaid Insurance account had a $8,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1,220 of unexpired insurance coverage remains. c. The Office Supplies account had a $390 debit balance at the beginning of December; and $2,680 of office supplies were purchased in December. The December 31 physical count showed $460 of supplies available. d. Two-thirds of the work related to $12,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,200 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of rental policies showed that $3,980 of rental coverage had expired. f. Wage expenses of $2,000 have been incurred but are not paid as of December 31. Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 2, Alexander Company paid $21,600 to purchase equipment that has a useful life of 6 years. The equipment will be depreciated equally over the 6- year period as depreciation expense. The cost of $21,600 is divided by the useful life of 6 years to determine the amount of the yearly depreciation expense of $3,600. If the appropriate adjusting entry is not made at the end of the year, what will be the effect on: (a) Income statement accounts (overstated, understated, or no effect)? (b) Net income (overstated, understated, or no effect)? E Aa (c) Balance sheet accounts (overstated, understated, or no effect)? Income Statement Accounts Choose One O Choose One Choose One O Balance Sheet Accounts Ⓒ2022 McGraw Hill LLC. All Rights Reserved. Terms of Use | Privacy Center (3) (1) DII DD F10 F8 Revenue: Expense: Net Income: Assets: Liabilities: Retained Earnings: Explanation :0 F1 Choose One O Choose One C Choose One X Start over do Check F2 ? 80 F3 000 000 F4 F5 MacBook Air F6 A F7 F9…
Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value.a. Prepare the journal entry necessary for recording the purchase of the new carpet.b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek Company uses the straight-line method.
Your staff person has provided you with the following journal entry for January 20x1 depreciation. The monthly deprecation is supposed to be $100.00. What is wrong with this entry?
The Oriole Company purchased equipment for $16800 on December 1. It is estimated that annual depreciation on the computer will be $3360. If financial statements are to be prepared on December 31, the company should make the following adjusting entry debit Equipment, $16800; credit Accumulated Depreciation, $16800. debit Depreciation Expense, $13440; credit Accumulated Depreciation, $13440. debit Depreciation Expense, $280; credit Accumulated Depreciation, $280. debit Depreciation Expense, $3360; credit Accumulated Depreciation, $3360.
Adjustment for Depreciation Cowley Company just completed its first year of operations. The December 31 equipment account has a balance of $20,000. There is no balance in the Accumulated Depreciation-Equipment account or in the Depreciation Expense account. The accountant estimates the yearly equipment depreciation to be $4,000. Prepare the required adjustment to record the yearly depreciation for equipment. Note: Use negative signs with answers, when appropriate. Balance Sheet Income Statement Stockholders Assets Liabilities Equity Revenues Expenses = Net Income 20,000 4,000 Check O Previous A Save Answers
On 31 December, a finishing machine was sold. Accumulated depreciation to 30 June was $10,000. The depreciation for 6 months ended 31 December was $3,000. Its capital cost was $25,000 and accumulated depreciation was $13,000 at date of sale. The machine was sold for cash to Jake Strong for $14,300 (including GST). Balance date is 30 June. a. Record General Journal entries to account for the depreciation 6 months ended 31 December and the sale of the finishing machine and post to the relevant ledger accounts.
Read the description of the following adjustments that are required at the end of the accounting period for Paulo Consulting Services. Record the necessary journal entries required at the end of January. (Round your answers to the nearest whole dollar.) Equipment was purchased on January 1, 20X1, for $45,000 and has an estimated useful life of 8 years with a salvage value of 3,720. Depreciation is computed using the straight-line method. Signed a 5-month contract for $6,210 of prepaid advertising on January 1, 20X1. Prepaid rent for the year on January 1, 20X1, in the amount of 26,950. Purchased supplies for $7,000 on January 1, 20X1. Inventory of supplies was $5,650 on January 31, 20X1. Do not give answer in image
Further information 1. Depreciation has not yet been charged. There were no movements in non-current assets during the year. The plant is depreciated at 10% straight-line on a monthly basis taking into account the month of sale or purchase. Freehold buildings are depreciated over their useful life of 40 years. Depreciation on the plant is charged to cost of sales. Depreciation on freehold buildings is charged to administrative expenses. 2. Closing inventories at cost amounted to £8,650,000. 3. The company paid £138,000 in insurance costs in August 2020, which covered the period from 1 September 2020 to 31 August 2021. This was included in administrative expenses in the trial balance. 4. Interest on the bank loan for the last three months of the year has not been included in the accounts in the trial balance. The corresponding figure as at 31 December 2019 was £220,000. 5. The income tax charge for the year has been calculated as £1,030,000. 6. A cheque received from…
Required information [The following information applies to the questions displayed below.] a. Depreciation on the company's wind turbine equipment for the year is $5,300. b. The Prepaid Insurance account for the solar panels had a $2,300 debit balance at December 31 before adjusting for the costs of any expired coverage. Analysis of prepaid insurance shows that $750 of unexpired insurance coverage remains at year-end. c. The company received $3,900 cash in advance for sustainability consulting work. As of December 31, one-third of the sustainability consulting work had been performed. d. As of December 31, $1,500 in wages expense for the organic produce workers has been incurred but not yet paid. e. As of December 31, the company has earned, but not yet recorded, $430 of interest revenue from investments in socially responsible bonds. The interest revenue is expected to be received on January 12. or each of the above separate cases, prepare the required December 31 year-end adjusting…
The ledger of Hillsboro Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Assume no adjusting entries were made in Januaray or February either. Prepaid Insurance Supplies Equipment Accumulated Depreciation- Equipment Notes Payable Unearned Rent Revenue Rent Revenue Interest Expense Salaries and Wages Expense Debit $ 3,600 3,053 26,200 -0- 15,330 Credit $ 8,921 20,600 7,500 54,170
The accounting records of Ehrlich Inc. show the following data for 20201. Life insurance expense on officers was $10,000.2. Equipment was acquired in early January for $450,000. Straight-line depreciation over a 6-year life is used, with no salvagevalue. For tax purposes, Ehrlich used a 30% rate to calculate depreciation.3. Interest revenue on municipal bonds totaled $3,600.4. Product warranties were estimated to be $90,000 in 2020. Actual repair and labor costs related to the warranties in 2020were $24,000. The remainder is estimated to be paid evenly in 2021 and 2022.5. Sales on an accrual basis were $500,000. For tax purposes, $400,000 was recorded on the installment-sales method.6. Fines incurred for securities violations were $10,600.7. Pretax financial income was $460,000. The tax rate is 30%.Instructions(a) Prepare a schedule starting with pretax financial income in 2020 and ending with taxable income in 2020.(b) Prepare the journal entry for 2020 to record income taxes payable,…
Depreciation on the company's equipment for the year is computed to be $14,000. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $540 of unexpired insurance coverage remains. The Supplies account had a $430 debit balance at the beginning of the year, and $2,680 of supplies were purchased during the year. The December 31 physical count showed $507 of supplies available. One-fourth of the work related to $11,000 of cash received in advance was performed this period. The Prepaid Rent account had a $5,300 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $4,760 of prepaid rent had expired. Wage expenses of $6,000 have been incurred but are not paid as of December 31. Prepare adjusting journal entries for the year ended December 31 for each separate situation.