The information presented below was obtained from a review of the General Ledger (before adjustments) and other records of Chicken Co. at the close of its current fiscal year December 31, 2001. The weekly payroll amounts to $11,000 for a five-day week and is paid every Friday for that week. December 31, 2001 falls on a Tuesday. a) The company owns a truck purchased on October 1, 2000 at a cost of $22,000. It has an estimated useful life of 5 years and an estimated salvage value of $400. b) c) Unearned rent has a credit balance of $4,500 composed of the following: (1) $900 representing rent for January-March 2001 inclusive. (2) $3,600 represents an advance payment for 12 months rent beginning April 1, 2001. The "Office Supplies" account had a balance of $160 at the beginning of the year; $880 were purchased during the year, and $610 was on hand at the end of the year. d) e) As advance premiums are paid on insurance policies, Prepaid Insurance is debited which has a balance on December 31, 2001 of $4,000. Policies are as follows: Policy # Date of Purchase Life Amount November 1, 2000 May 1, 2001 June 1, 2001 $ 1,440 1,680 960 137 D 3 662 G 1 717 E Y 1 f) The company rented another office to a tenant for a six-month period, starting November 15, 2001 for $180 per month, to be paid in full at the end of the six-month period. Prepare Adjusting Journal Entries for the above information For adjustment (a), prepare all the journal entry required to record the subsequent payment of wages.
The information presented below was obtained from a review of the General Ledger (before adjustments) and other records of Chicken Co. at the close of its current fiscal year December 31, 2001. The weekly payroll amounts to $11,000 for a five-day week and is paid every Friday for that week. December 31, 2001 falls on a Tuesday. a) The company owns a truck purchased on October 1, 2000 at a cost of $22,000. It has an estimated useful life of 5 years and an estimated salvage value of $400. b) c) Unearned rent has a credit balance of $4,500 composed of the following: (1) $900 representing rent for January-March 2001 inclusive. (2) $3,600 represents an advance payment for 12 months rent beginning April 1, 2001. The "Office Supplies" account had a balance of $160 at the beginning of the year; $880 were purchased during the year, and $610 was on hand at the end of the year. d) e) As advance premiums are paid on insurance policies, Prepaid Insurance is debited which has a balance on December 31, 2001 of $4,000. Policies are as follows: Policy # Date of Purchase Life Amount November 1, 2000 May 1, 2001 June 1, 2001 $ 1,440 1,680 960 137 D 3 662 G 1 717 E Y 1 f) The company rented another office to a tenant for a six-month period, starting November 15, 2001 for $180 per month, to be paid in full at the end of the six-month period. Prepare Adjusting Journal Entries for the above information For adjustment (a), prepare all the journal entry required to record the subsequent payment of wages.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The information presented below was obtained from a review of the General Ledger (before
adjustments) and other records of Chicken Co. at the close of its current fiscal year December 31,
2001.
The weekly payroll amounts to $11,000 for a five-day week and is paid every Friday for that
week. December 31, 2001 falls on a Tuesday.
a)
The company owns a truck purchased on October 1, 2000 at a cost of $22,000. It has an
estimated useful life of 5 years and an estimated salvage value of $400.
b)
c)
Unearned rent has a credit balance of $4,500 composed of the following:
(1) $900 representing rent for January-March 2001 inclusive.
(2) $3,600 represents an advance payment for 12 months rent beginning April 1,
2001.
d)
The "Office Supplies" account had a balance of $160 at the beginning of the year; $880
were purchased during the year, and $610 was on hand at the end of the year.
As advance premiums are paid on insurance policies, Prepaid Insurance is debited which has
a balance on December 31, 2001 of $4,000. Policies are as follows:
e)
Policy #
Date of Purchase
Life
Amount
137 D
662 G
November 1, 2000
May 1, 2001
June 1, 2001
$ 1,440
1,680
960
3
1
717 E Y
1
f)
The company rented another office to a tenant for a six-month period, starting November
15, 2001 for $180 per month, to be paid in full at the end of the six-month period.
Prepare Adjusting Journal Entries for the above information
For adjustment (a), prepare all the journal entry required to record the subsequent payment
of wages.
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