Adjusting Entries Your examination of Sullivan Company's records provides the following information for the December 31, year-end adjustments:   1.Bad debts are to be recorded at 2% of sales. Sales made on credit totaled $25,000 for the year. Salaries at year-end that have accumulated but have not been paid total $1, Annual straight-line depreciation for the company's equipment is based on a cost of $30,000, an estimated life of 8years, and an estimated residual value of $2,000. Prepaid insurance in the amount of $800 has Interest that has been earned but not collected totals $ The company has satisfied performance obligations entitling it to rent m the amount of $1,000. Interest on a note payable that has accumulated but has not been paid totals $600. The income tax rate is 30% on current income and is payable in the first quarter of the next y The pretax income before the preceding adjusting entries is $6,800.   Required:   Prepare the adjusting entries to record the preceding information

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question

Adjusting Entries Your examination of Sullivan Company's records provides the following information for the December 31, year-end adjustments:

 

1.Bad debts are to be recorded at 2% of sales. Sales made on credit totaled $25,000 for the year.

  1. Salaries at year-end that have accumulated but have not been paid total $1,
  2. Annual straight-line depreciation for the company's equipment is based on a cost of

$30,000, an estimated life of 8years, and an estimated residual value of $2,000.

  1. Prepaid insurance in the amount of $800 has
  2. Interest that has been earned but not collected totals $
  3. The company has satisfied performance obligations entitling it to rent m the amount of

$1,000.

  1. Interest on a note payable that has accumulated but has not been paid totals $600.
  2. The income tax rate is 30% on current income and is payable in the first quarter of the next y The pretax income before the preceding adjusting entries is $6,800.

 

Required:

 

Prepare the adjusting entries to record the preceding information

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Completing the Accounting Cycle
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education