Ee.65. Arnez Company's annual accounting period ends on December 31. The following information concerns the adjusting entries to berecorded as of that dateo. The Office Supplies account started the year with a $4,075 balance. During the year, the company purchased supplies for $16,830,which was added to the Office Supplies account. The inventory of supplies available at December 31 totaled $3,586.b. The Prepaid Insurance account had a $30,984 debit balance at December 31 before adjusting for the costs of any expired coveragefor the year. An analysis of prepaid insurance shows that $22,299 of unexpired insurance coverage remains at year-end.c. The company has 15 employees, who earn a total of $1,700 in salaries each working day. They are paid each Monday for their workin the five-day workweek ending on the previous Friday. Assume that December 31 is a Tuesday, and all 15 employees worked thefirst two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for five full days on Monday, January6 of next year.1d. The company purchased a building at the beginning of this year. It cost $790,000 and is expected to have a $45,000 salvage valueat the end of its predicted 20-year life. Annual depreciation is $37,250.Required 1 Required 22Prepare journal entries to record the first subsequent cash transaction in January of the next year for parts c and e.Noe. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $2,100 per month,starting on November 1. The rent was paid on time on November 1, and the amount received was credited to Rent Revenue.However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who haspromised to pay both December and January rent in full on January 311. On November 1, the company rented space to another tenant for $1,903 per month. The tenant paid five months' rent in advance onthat date. The payment was recorded with a credit to the Uneamed Revenue account.Assume no other adjusting entries are made during the year.DateJanuary 06January 31Salaries expenseSalaries payableAccounts receivableUnearned revenueGeneral Journal< Required 1Required 2 >30**Debit3,400 X3,806Credit3,400 X3,806

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Description: Ee.65. Arnez Company's annual accounting period ends on December 31. The following information concerns the adjusting entries to berecorded as of that dateo. The Office Supplies account started the year with a $4,075 balance. During the year, the com

Journal entries is a tool for recording business transactions into accounting records.

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Accounting

Required 1 Required 2 Prepare journal entries to record the first subsequent cash transaction in January of the next year for parts c and e. Credit No 1 2 Date January 06 January 31 Salaries expense Salaries payable Accounts receivable Unearned revenue General Journal < Required 1 Required 2 > ›› X X Debit 3,400 3,806 3,400 3,806X

Required 1 Required 2 Prepare journal entries to record the first subsequent cash transaction in January of the next year for parts c and e. Credit No 1 2 Date January 06 January 31 Salaries expense Salaries payable Accounts receivable Unearned revenue General Journal < Required 1 Required 2 > ›› X X Debit 3,400 3,806 3,400 3,806X

College Accounting (Book Only): A Career Approach

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Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 4PA: The following accounts appear in the ledger of Celso and Company as of June 30, the end of this...

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Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.

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Question

Ee.65.

Arnez Company's annual accounting period ends on December 31. The following information concerns the adjusting entries to be
recorded as of that date
o. The Office Supplies account started the year with a $4,075 balance. During the year, the company purchased supplies for $16,830,
which was added to the Office Supplies account. The inventory of supplies available at December 31 totaled $3,586.
b. The Prepaid Insurance account had a $30,984 debit balance at December 31 before adjusting for the costs of any expired coverage
for the year. An analysis of prepaid insurance shows that $22,299 of unexpired insurance coverage remains at year-end.
c. The company has 15 employees, who earn a total of $1,700 in salaries each working day. They are paid each Monday for their work
in the five-day workweek ending on the previous Friday. Assume that December 31 is a Tuesday, and all 15 employees worked the
first two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for five full days on Monday, January
6 of next year.
1
d. The company purchased a building at the beginning of this year. It cost $790,000 and is expected to have a $45,000 salvage value
at the end of its predicted 20-year life. Annual depreciation is $37,250.
Required 1 Required 2
2
Prepare journal entries to record the first subsequent cash transaction in January of the next year for parts c and e.
No
e. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $2,100 per month,
starting on November 1. The rent was paid on time on November 1, and the amount received was credited to Rent Revenue.
However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has
promised to pay both December and January rent in full on January 31
1. On November 1, the company rented space to another tenant for $1,903 per month. The tenant paid five months' rent in advance on
that date. The payment was recorded with a credit to the Uneamed Revenue account.
Assume no other adjusting entries are made during the year.
Date
January 06
January 31
Salaries expense
Salaries payable
Accounts receivable
Unearned revenue
General Journal
< Required 1
Required 2 >
30
**
Debit
3,400 X
3,806
Credit
3,400 X
3,806

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