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total liabilities and stockholders equity Adjusting Entries 1. An inventory of supplies showed $4,300 were used up.

total liabilities and stockholders equity Adjusting Entries 1. An inventory of supplies showed $4,300 were used up.

FINANCIAL ACCOUNTING
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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total liabilities and stockholders equity Adjusting Entries 1. An inventory of supplies showed $4,300 were used up. 2. The furniture was purchased for $45,000. It has $5,000 salvage value and a 5 year useful life. One year of depreciation must be recorded. 3. $3,000 of insurance was purchased for 12 months. $1,200 of insurance was used. 4. Performed $32,000 of services that was paid for in advance 5. On last day of the month, performed $8,000 of services for new customer and will be paid next month 6. Happy cleaners provided $3,100 of cleaning services on the last day of the month. This waas a special yearly clean. They will be paid next month. 7. An inventory count revealed there was $4,500 of inventory shrinkage. This was a larger than usual amount of shrinkage. 8. The company estimates bad debt expense to be 2% of credit sales. Assume all sales are made on credit. 9. A company with net assets of $600,000 was purchased for $700,000 one year ago. The current fair value of the company is 685,000. Perform a goodwill impairment test and record an impairment entry if one is needed. 10. The company had a calculated warranty expense of $7,000 Account Title Cash Inventory Accounts Receivable Office Supplies Prepaid Insurance Furniture Land Goodwill Accounts Payable Utilities Payable Unearned Revenue Common Stock Dividends Service Revenue Cost of goods sold Salaries Expense Rent Expense Utilities Expense Total ANN SIMPSON, DESIGNER Unadjusted Trial Balance November 30, 2018 Balance Debit $23,400 $60,000 22,000 5,000 3,000 20,000 24,000 40,000 4,000 Credit $19,900 600 38,000 100,000 76,900 25,000 6,000 2,000 1,000 $ 235,400 $235,400
Transcribed Image Text:total liabilities and stockholders equity Adjusting Entries 1. An inventory of supplies showed $4,300 were used up. 2. The furniture was purchased for $45,000. It has $5,000 salvage value and a 5 year useful life. One year of depreciation must be recorded. 3. $3,000 of insurance was purchased for 12 months. $1,200 of insurance was used. 4. Performed $32,000 of services that was paid for in advance 5. On last day of the month, performed $8,000 of services for new customer and will be paid next month 6. Happy cleaners provided $3,100 of cleaning services on the last day of the month. This waas a special yearly clean. They will be paid next month. 7. An inventory count revealed there was $4,500 of inventory shrinkage. This was a larger than usual amount of shrinkage. 8. The company estimates bad debt expense to be 2% of credit sales. Assume all sales are made on credit. 9. A company with net assets of $600,000 was purchased for $700,000 one year ago. The current fair value of the company is 685,000. Perform a goodwill impairment test and record an impairment entry if one is needed. 10. The company had a calculated warranty expense of $7,000 Account Title Cash Inventory Accounts Receivable Office Supplies Prepaid Insurance Furniture Land Goodwill Accounts Payable Utilities Payable Unearned Revenue Common Stock Dividends Service Revenue Cost of goods sold Salaries Expense Rent Expense Utilities Expense Total ANN SIMPSON, DESIGNER Unadjusted Trial Balance November 30, 2018 Balance Debit $23,400 $60,000 22,000 5,000 3,000 20,000 24,000 40,000 4,000 Credit $19,900 600 38,000 100,000 76,900 25,000 6,000 2,000 1,000 $ 235,400 $235,400
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