Yilmaz A.Ş. encounters the following situations: Identify the type of adjusting entry needed. Yilmaz collects 1,300 from a customer in 2020 for services to be performed in 2021. Yilmaz incurs utility expense which is not yet paid in cash or recorded. Yilmaz’s employees worked 3 days in 2020 but will not be paid until 2021. Yilmaz performs services for customers but has not yet received cash or recorded the transaction. Yilmaz paid 2,800 rent on December 1 for the 4 months starting December 1. Yilmaz received cash for future services and recorded a liability until the service was performed. Yilmaz performed consulting services for a client in December 2020. On December 31, it had not billed the client for services provided of 1,200. Yilmaz paid cash for an expense and recorded an asset until the item was used up. Yilmaz purchased 900 of supplies in 2020; at year-end, 400 of supplies remain unused. Yilmaz purchased equipment on January 1, 2020; the equipment will be used for 5 years. Yilmaz borrowed 12,000 on October 1, 2020, signing an 8% one-year note payable. Instructions Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020

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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Yilmaz A.Ş. encounters the following situations:

Identify the type of adjusting entry needed.

Yilmaz collects 1,300 from a customer in 2020 for services to be performed in 2021.
Yilmaz incurs utility expense which is not yet paid in cash or recorded.
Yilmaz’s employees worked 3 days in 2020 but will not be paid until 2021.
Yilmaz performs services for customers but has not yet received cash or recorded the transaction.
Yilmaz paid 2,800 rent on December 1 for the 4 months starting December 1.
Yilmaz received cash for future services and recorded a liability until the service was performed.
Yilmaz performed consulting services for a client in December 2020. On December 31, it had not billed the client for services provided of 1,200.
Yilmaz paid cash for an expense and recorded an asset until the item was used up.
Yilmaz purchased 900 of supplies in 2020; at year-end, 400 of supplies remain unused.
Yilmaz purchased equipment on January 1, 2020; the equipment will be used for 5 years.
Yilmaz borrowed 12,000 on October 1, 2020, signing an 8% one-year note payable.

Instructions

Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020.

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