Consider the following items for Huskies Insurance Company: 1. Income taxes for the year total $50,000 but won't be paid until next April 15. 2. On June 30, the company lent its chief financial officer $58,000; principal and interest at 7% are due in one year. 3. On October 1, the company received $14,800 from a customer for a one-year property insurance policy. Deferred Revenue was recorded on October 1. Insurance services provided to other customers during the year totaled $104,000. Required: For each item, determine the accounts to be adjusted on December 31, the amount of the adjustment, and the ending balance. Assume no adjustments were previously made during the year. Note: Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. 1. Answer is complete but not entirely correct. Account Balance before adjustment December 31 Adjustment December 31 Ending balance 2. Balance before adjustment December 31 Adjustment December 31 Ending balance 3 Balance before adjustment December 31 Adjustment December 31 Ending balance Income Tax Payable Income Tax Expense ✔ S S S 0 50,000✔ 50,000 Interest Receivable ✔ Interest Revenue $ 0 S $ 50,000✔ 50,000 (2,030) X (2,030) ✔ 0 2,030✔ 2,030 Deferred Revenue ✔Service Revenue S 14,800✔✔ S (3,700) 11,100 $ ✔ 104,000✔ 3,700 107,700
Consider the following items for Huskies Insurance Company: 1. Income taxes for the year total $50,000 but won't be paid until next April 15. 2. On June 30, the company lent its chief financial officer $58,000; principal and interest at 7% are due in one year. 3. On October 1, the company received $14,800 from a customer for a one-year property insurance policy. Deferred Revenue was recorded on October 1. Insurance services provided to other customers during the year totaled $104,000. Required: For each item, determine the accounts to be adjusted on December 31, the amount of the adjustment, and the ending balance. Assume no adjustments were previously made during the year. Note: Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign. 1. Answer is complete but not entirely correct. Account Balance before adjustment December 31 Adjustment December 31 Ending balance 2. Balance before adjustment December 31 Adjustment December 31 Ending balance 3 Balance before adjustment December 31 Adjustment December 31 Ending balance Income Tax Payable Income Tax Expense ✔ S S S 0 50,000✔ 50,000 Interest Receivable ✔ Interest Revenue $ 0 S $ 50,000✔ 50,000 (2,030) X (2,030) ✔ 0 2,030✔ 2,030 Deferred Revenue ✔Service Revenue S 14,800✔✔ S (3,700) 11,100 $ ✔ 104,000✔ 3,700 107,700
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Consider the following items for Huskies Insurance Company:
1. Income taxes for the year total $50,000 but won't be paid until next April 15.
2. On June 30, the company lent its chief financial officer $58,000; principal and interest at 7% are due in one year.
3. On October 1, the company received $14,800 from a customer for a one-year property insurance policy. Deferred Revenue was
recorded on October 1. Insurance services provided to other customers during the year totaled $104,000.
Required:
For each item, determine the accounts to be adjusted on December 31, the amount of the adjustment, and the ending balance.
Assume no adjustments were previously made during the year.
Note: Do not round intermediate calculations. Amounts to be deducted should be indicated with a minus sign.
1.
X Answer is complete but not entirely correct.
Account
Balance before adjustment
December 31 Adjustment
December 31 Ending
balance
2.
Balance before adjustment
December 31 Adjustment
December 31 Ending
balance
3.
Balance before adjustment
December 31 Adjustment
December 31 Ending
balance
Income Tax Payable
$
Interest Receivable
$
$
Income Tax Expense
$
0
50,000✔
50,000 $
$
0
50,000✔
50,000
✔ Interest Revenue
0 $
(2,030) X
(2,030) $
0
2,030✔
2,030
Deferred Revenue ✓ Service Revenue
14,800 $
(3,700) ✔
11,100 $
OOO
✓
104,000✔
107,700
3,700✔
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