Assessing Financial Statement Effects of Transactions and AdjustmentsSelected accounts of Piotroski Properties, a real estate management firm, are shown below as of January 31, before any accounts havebeen adjusted.Prepaid InsuranceSuppliesOffice EquipmentUnearned Rent RevenueSalaries ExpenseRent RevenuePiotroski Properties prepares monthly financial statements. Using the following information, adjust the accounts as necessary on January31 using the financial statements effect template.(a) Prepaid insurance represents a three-year premium paid on January 1.(b) Supplies of $850 were still available on January 31.(c) Office equipment is expected to last eight years (or 96 months).(d) The unearned rent revenue represents six months of rent received in advance on January 1.(e) Salaries of $980 have been earned by employees but yet not recorded as of January 31.Balance SheetTransaction$13,3203,86011,90410,5006,20030,000(a)(b)(C)(d)(e)CashAsset0O O O O000+NoncashAssets0000= Liabilities +00000ContributedCapital00000+EarnedCapital00000Income StatementRevenue - Expenses = Net Income0O O O O000000000O O O O O000

As per dual concept of accounting, every transaction has dual impact on the books of accounts.The…

Answered: Selected accounts of Piotroski…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prospect Realty Co. pays weekly salaries of $9,570 on Monday for a six-day workweek ending the preceding Saturday. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday. Refer to the Chart of Accounts for exact wording of account titles. Round your answer to the nearest dollar.
Using Liability Method.
Smokey Company purchases a one-year insurance policy on July 1 for $11,136. The adjusting entry on December 31 is a.debit Insurance Expense, $5,568 and credit Prepaid Insurance, $5,568 b.debit Insurance Expense, $928 and credit Prepaid Insurance, $11,136 c.debit Insurance Expense, $11,136 and credit Prepaid Insurance, $11,136 d.debit Prepaid Insurance, $10,208 and credit Cash, $10,208
The prepaid insurance account had a beginning balance of $6,000 and was debited for $7,200 of premiums paid during the year. Journalize the adjusting entry required at the end of the year assuming the amount of unexpired insurance related to future periods is $4,200.
Omega Company adjusts its accounts at the end of each month. The following information has been assembled in order to prepare the required adjusting entries at December 31, Year 1: (1) A one-year bank loan of $684,000 at an annual interest rate of 10% had been obtained on December 1, Year 1. (2) The company pays all employees up-to-date each Friday. Since December 31, Year 1, fell on Tuesday, there was a liability to employees at that date for two day's pay amounting to $6,200. (3) On December 1, Year 1, rent on the office building had been paid for four months. The monthly rent is $5,400. (4) Depreciation of office equipment is based on an estimated useful life of six years. The balance in the Office Equipment account is $15,120; no change has occurred in the account during the year. (5) Fees of $9,200 were earned during the month for clients who had paid in advance. By what amount will the book value of the office equipment decline after the appropriate December…
Wilson Company paid $6,300 for a 4-month insurance premium in advance on November 1, with coverage beginning on that date. The balance in the prepaid insurance account before adjustment at the end of the year is $6,300, and no adjustments had been made previously. The adjusting entry required on December 31 is: Multiple Choice O O O Debit Prepaid Insurance, $1,575; credit Insurance Expense, $1,575. Debit Cash, $6,300; Credit Prepaid Insurance, $6,300. Debit Prepaid Insurance, $3,150; credit Insurance Expense, $3,150. O Debit Insurance Expense, $1,575; credit Prepaid Insurance, $1,575. Debit Insurance Expense, $3,150; credit Prepaid Insurance, $3,150.
Reviewing insurance policies revealed that a single policy was purchased on August 1, for oneyear’s coverage, in the amount of $6,000. There was no previous balance in the Prepaid Insurance account atthat time. Based on the information provided:A. Make the December 31 adjusting journal entry to bring the balances to correct.B. Show the impact that these transactions had.
The geological consulting firm of Gilbert, Marsh, & Kester prepares adjusting entries on a monthly basis. Among the items requiring adjustment on December 31, year 2, are the following. The company has outstanding a $50,000, 9 percent, 2-year note payable issued on July 1, year 1. Payment of the $50,000 note, plus all accrued interest for the 2-year loan period, is due in full on June 30, year 3. The firm is providing consulting services to Texas Oil Company at an agreed-upon rate of $1,000 per day. At December 31, 10 days of unbilled consulting services have been provided. Instructions Assume that on January 30, year 3, Gilbert, Marsh, & Kester receive $25,000 from Texas Oil Company in full payment of the consulting services provided in December and January. What portion of this amount constitutes revenue earned in January?
Gizmo Inc. purchased a one-year insurance policy on October 1 for $5,520. Required: Prepare the adjusting entry on December 31. Refer to the Chart of Accounts for exact wording of account titles. CHART OF ACCOUNTS Gizmo Inc. General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Office Building 17 Accumulated Depreciation-Office Building LIABILITIES 21 Accounts Payable 22 Notes Payable 23 Unearned Fees 24 Wages Payable 25 Interest Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends Prepare the adjusting entry on December 31. Refer to the Chart of Accounts for exact wording of account titles.
On March 31, a company with a June 30 fiscal year-end pays $3,600,000 to an insurance company for a two- year insurance policy that will start today. Prepare the journal entry for the March 31 transaction AND the appropriate adjusting journal entry that would be needed at the end of the fiscal year.
Assessing Financial Statement Effects of Transactions and Adjustments Selected accounts of Piotroski Properties, a real estate management firm, are shown below as of January 31, before any accounts have been adjusted. Prepaid Insurance Supplies Office Equipment Unearned Rent Revenue Salaries Expense Rent Revenue Piotroski properties prepares monthly financial statements. Using the following information, adjust the accounts as necessary on January 31, using the financial statement effects template. (a) Prepaid insurance represents a three-year premium paid on January 1. (b) Supplies of $850 were still available on January 31. (c) Office equipment is expected to last eight years (or 96 months). (d) The unearned rent revenue represents six months of rent received in advance on January 1. (e) Salaries of $490 have been earned by employees but yet not recorded as of January 31. Balance Sheet Transaction (a) (b) (c) (d) (e) $6,660 1,930 8,928 5,250 3,100 15,000 Check Cash Asset + Noncash…
The prepaid insurance account had a beginning balance of $3,755 and was debited for $6,755 of premiums paid during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $2,640. Refer to the Chart of Accounts for exact wording of account titles.

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