Scenario 1: On December 1, the balance of supplies totals $400. On December 15, the company purchases an additional $200 of supplies with cash. By the end of December, only $100 of supplies remains. Scenario 2: On November 4, Company receives $6,000 cash from a local moving company in agreement to provide truck maintenance of $1,000 each month for the next six months beginning in December. Scenario 3: Employees have worked the final four days in December, earning $600, but have not yet been paid. Company plans to pay its employees on January 2 Scenario 4: Customers receiving $250 of maintenance services from Midas on December 29 have not been billed as of the end of the month. These customers will be billed on January 3 and are expected to pay the full amount owed on January 6. Scenario 5: At the beginning of the year, AdShop’s depreciable equipment has a cost of $28,0000, a four year life, and no salvage value. The equipment is depreciated $7,000 yearly over the four years service life. Scenario 6: On October 1, 2020 the company borrows $20,000 from a local bank and signs a note. Principal and interest at 12% will be paid in 4 years.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Scenario 1: On December 1, the balance of supplies totals $400. On December 15, the company purchases an additional $200 of supplies with cash. By the end of December, only $100 of supplies remains.
Scenario 2: On November 4, Company receives $6,000 cash from a local moving company in agreement to provide truck maintenance of $1,000 each month for the next six months beginning in December.
Scenario 3: Employees have worked the final four days in December, earning $600, but have not yet been paid. Company plans to pay its employees on January 2
Scenario 4: Customers receiving $250 of maintenance services from Midas on December 29 have not been billed as of the end of the month. These customers will be billed on January 3 and are expected to pay the full amount owed on January 6.
Scenario 5: At the beginning of the year, AdShop’s depreciable equipment has a cost of $28,0000, a four year life, and no salvage value. The equipment is depreciated $7,000 yearly over the four years service life.
Scenario 6: On October 1, 2020 the company borrows $20,000 from a local bank and signs a note. Principal and interest at 12% will be paid in 4 years.
- For each scenario indicate the
adjusting entry classification: Prepaid Expense,Depreciation Expense, Accrued Expense, or Accrued Revenue. - For each scenario record the December 31, 2021 adjusting entry.
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