Record the adjusting entries for each of these independent situations as of December 31, 2017 (unless otherwise specified in the problem). Assume no other entries were made during the year. Tate Company purchased equipment on November 1, 2017 and gave a 3-month, 9% note with a face value of $80,000. Garcia Corporation received cash of $60,000 on August 1, 2017 for one year's rent in advance and recorded the transaction with a credit to Rent Revenue. Gibson Company paid $24,000 on June 1, 2017 for a two-year insurance policy and recorded the entire amount as Insurance Expense. Wallstrom pays its employees are paid every Friday for the five-day week ending on that day. Salaries amount to $4,000 per week. December 31 falls on a Tuesday. Record the adjustments that would be made on December 31, 2017, the end of the fiscal year, assuming Bloom Company’s supplies inventory on January 1, 2017 was $9,350. Supplies costing $24,150 were acquired during the year and charged to the supplies inventory. A count on December 31, 2017 indicated supplies on hand of $8,810. Starr Corporation loaned $600,000 to another corporation on December 1, 2017 and received a 3-month, 8% interest-bearing note with a face value of $600,000. Equipment having a cost of $100,000 and accumulated depreciation of $20,000 was purchased on July 1, 2016. What adjusting entry would be recorded on December 31, 2017 if the equipment has a ten-year life and the straight-line method is used?
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.
- Record the
adjusting entries for each of these independent situations as of December 31, 2017 (unless otherwise specified in the problem). Assume no other entries were made during the year. - Tate Company purchased equipment on November 1, 2017 and gave a 3-month, 9% note with a face value of $80,000.
- Garcia Corporation received cash of $60,000 on August 1, 2017 for one year's rent in advance and recorded the transaction with a credit to Rent Revenue.
- Gibson Company paid $24,000 on June 1, 2017 for a two-year insurance policy and recorded the entire amount as Insurance Expense.
- Wallstrom pays its employees are paid every Friday for the five-day week ending on that day. Salaries amount to $4,000 per week. December 31 falls on a Tuesday.
- Record the adjustments that would be made on December 31, 2017, the end of the fiscal year, assuming Bloom Company’s supplies inventory on January 1, 2017 was $9,350. Supplies costing $24,150 were acquired during the year and charged to the supplies inventory. A count on December 31, 2017 indicated supplies on hand of $8,810.
- Starr Corporation loaned $600,000 to another corporation on December 1, 2017 and received a 3-month, 8% interest-bearing note with a face value of $600,000.
- Equipment having a cost of $100,000 and
accumulated depreciation of $20,000 was purchased on July 1, 2016. What adjusting entry would be recorded on December 31, 2017 if the equipment has a ten-year life and the straight-line method is used?
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