Given the following transactions of LAMA company during the year 2018. On October 1, 2018, the company received cash of $12,000 in advance for services to be performed over 6 months. On December 31, 2018, a salary of $1,650 has not been paid yet On July 1, 2018, the company purchased an equipment for $50,000. It is estimated that the machine will have a residual value of $5,000 and a useful life of 5 years. On December 31, 2018, services earned but not collected in cash are $7000 Required Prepare the adjusting entries on December 31, 2018.

Given the following transactions of LAMA company during the year 2018. On October 1, 2018, the company received cash of $12,000 in advance for services to be performed over 6 months. On December 31, 2018, a salary of $1,650 has not been paid yet On July 1, 2018, the company purchased an equipment for $50,000. It is estimated that the machine will have a residual value of $5,000 and a useful life of 5 years. On December 31, 2018, services earned but not collected in cash are $7000 Required Prepare the adjusting entries on December 31, 2018.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter10: Long-lived Tangible And Intangible Assets

Section: Chapter Questions

Problem 22E

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Question

Exercise:

Given the following transactions of LAMA company during the year 2018.

On October 1, 2018, the company received cash of $12,000 in advance for services to be performed over 6 months.

On December 31, 2018, a salary of $1,650 has not been paid yet

On July 1, 2018, the company purchased an equipment for $50,000. It is estimated that the machine will have a residual value of $5,000 and a useful life of 5 years.

On December 31, 2018, services earned but not collected in cash are $7000

Required

Prepare the adjusting entries on December 31, 2018.

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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