PARRISH 4-7/4-8/HOMEWORK ADJUSTING ENTRIES Please read the transactions below and show what adjusting entries need to be made, if any, on each transaction. Please respond in the same format as the question are asked. Ex: Cash 1000 Accounts Payable 1000 a) To record depreciation on the company truck for one year. The truck's original cost was $12,200, with a $1,000 salvage value and an estimated life of four years. (ALSO PLEASE EXPLAIN HOW SALVAGE VALUE IS USED) c) To record one month of itnerest expense. The compnay borrowed $12000 for two years at 5% interest per year. Interest is due every 6 months. (Please explain and show the interest and interest due dates affect the adjusting entry) 4-8 a) The office equipment is brand new, having been purchased only one year ago for $5000. Since it is expected to last 5 years and have a salvage value of $1000 the bookkeeper has decided that it really shows so little wear that depreciation need not to be taken this year. b) The company advertised in the local paper in the last month. When the bill was paid at the first of last month, the Prepaid Advertising Account was debited. Amount to use is $700 e) Money borrowed from the bank carries and interest rate of 6% per year. Interest was last paid a month ago and is due again in another five months. The amount borrowed is $20000 1) To record one year’s interest on a loan to an officer of the company. The loan was for $10,000 at 7% annual interest. 2) A customer paid us $600 in advance for merchandise to be shipped to him. At the time the check was received, the Unearned Revenue account was credited. The shipping clerk tell us that one-third of the merchandise has been shipped and received by the customer. 3) Interest on a loan at the bank is due as of Nobember 1. We borrowed the $5000 three months ago at 6% annual interest.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
PARRISH 4-7/4-8/HOMEWORK
Please read the transactions below and show what adjusting entries need to be made, if any, on each transaction. Please respond in the same format as the question are asked. Ex: Cash 1000
Accounts Payable 1000
a) To record
c) To record one month of itnerest expense. The compnay borrowed $12000 for two years at 5% interest per year. Interest is due every 6 months. (Please explain and show the interest and interest due dates affect the adjusting entry)
4-8
a) The office equipment is brand new, having been purchased only one year ago for $5000. Since it is expected to last 5 years and have a salvage value of $1000 the bookkeeper has decided that it really shows so little wear that depreciation need not to be taken this year.
b) The company advertised in the local paper in the last month. When the bill was paid at the first of last month, the Prepaid Advertising Account was debited. Amount to use is $700
e) Money borrowed from the bank carries and interest rate of 6% per year. Interest was last paid a month ago and is due again in another five months. The amount borrowed is $20000
1) To record one year’s interest on a loan to an officer of the company. The loan was for $10,000 at 7% annual interest.
2) A customer paid us $600 in advance for merchandise to be shipped to him. At the time the check was received, the Unearned Revenue account was credited. The shipping clerk tell us that one-third of the merchandise has been shipped and received by the customer.
3) Interest on a loan at the bank is due as of Nobember 1. We borrowed the $5000 three months ago at 6% annual interest.
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