Exercise 2: Greenock Company has the following information available for accruals for the year ended December 31, 2020. The company adjusts its accounts annually. 1. The December utility bill for $425 was unrecorded on December 31. Greenock paid the bill on January 11. 2. Greenock is open 7 days a week and employees are paid a total of $3,500 every Monday for a 7-day (Monday-Sunday) workweek. December 31 is a Thursday, so employees will have worked 4 days (Monday, December 28-Thursday, December 31) that they have not been paid for by year-end. Employees will be paid next on January 4. 3. Greenock signed a $48,000, 5% bank loan on November 1, 2020, due in 2 years. No interest pay- ments were made in 2020. Interest for 2020 was paid on January 1, 2021. 4. Greenock receives a fee from Pizza Shop next door for all pizzas sold to customers using Greenock's facility. The amount owed for December is $300, which Pizza Shop will pay on January 4. (Hint: Use the Service Revenue account.) 5. Greenock rented some of its unused warehouse space to a client for $6,000 a month, payable the first day of the following month. It received the rent for the month of December on January 2. Required: 1. Record the transactions in the general journal for 2017. 2. Post the transactions to the ledger (T accounts) and calculate closing balances of the accounts
Exercise 2: Greenock Company has the following information available for accruals for the year ended December 31, 2020. The company adjusts its accounts annually. 1. The December utility bill for $425 was unrecorded on December 31. Greenock paid the bill on January 11. 2. Greenock is open 7 days a week and employees are paid a total of $3,500 every Monday for a 7-day (Monday-Sunday) workweek. December 31 is a Thursday, so employees will have worked 4 days (Monday, December 28-Thursday, December 31) that they have not been paid for by year-end. Employees will be paid next on January 4. 3. Greenock signed a $48,000, 5% bank loan on November 1, 2020, due in 2 years. No interest pay- ments were made in 2020. Interest for 2020 was paid on January 1, 2021. 4. Greenock receives a fee from Pizza Shop next door for all pizzas sold to customers using Greenock's facility. The amount owed for December is $300, which Pizza Shop will pay on January 4. (Hint: Use the Service Revenue account.) 5. Greenock rented some of its unused warehouse space to a client for $6,000 a month, payable the first day of the following month. It received the rent for the month of December on January 2. Required: 1. Record the transactions in the general journal for 2017. 2. Post the transactions to the ledger (T accounts) and calculate closing balances of the accounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Exercise 2: Greenock Company has the following information available for accruals for the year ended
December 31, 2020. The company adjusts its accounts annually.
1. The December utility bill for $425 was unrecorded on December 31. Greenock paid the bill on
January 11.
2. Greenock is open 7 days a week and employees are paid a total of $3,500 every Monday for a 7-day
(Monday-Sunday) workweek. December 31 is a Thursday, so employees will have worked 4 days
(Monday, December 28-Thursday, December 31) that they have not been paid for by year-end.
Employees will be paid next on January 4.
3. Greenock signed a $48,000, 5% bank loan on November 1, 2020, due in 2 years. No interest pay-
ments were made in 2020. Interest for 2020 was paid on January 1, 2021.
4. Greenock receives a fee from Pizza Shop next door for all pizzas sold to customers using Greenock's
facility. The amount owed for December is $300, which Pizza Shop will pay on January 4. (Hint:
Use the Service Revenue account.)
5. Greenock rented some of its unused warehouse space to a client for $6,000 a month, payable the
first day of the following month. It received the rent for the month of December on January 2.
Required:
1. Record the transactions in the general journal for 2017.
2. Post the transactions to the ledger (T accounts) and calculate closing balances of the
accounts
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