GEN COMBO COLLEGE ACCOUNTING; CONNECT ACCESS CARD
GEN COMBO COLLEGE ACCOUNTING; CONNECT ACCESS CARD
4th Edition
ISBN: 9781260087376
Author: M. David Haddock Jr. Professor
Publisher: McGraw-Hill Education
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Chapter 13, Problem 4PB

1.

To determine

Journalize the adjusting entries as on December 31, 2019.

1.

Expert Solution
Check Mark

Explanation of Solution

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.

Pass the adjusting entry for the given transaction:

 General Journal  Page - 25
DateDescriptionPost Ref.DebitCredit
2019    
December 31Income Summary $16,985 
 Merchandise Inventory  $16,985
 (To record the beginning inventory)   
     
December 31Merchandise Inventory $15,840 
 Income Summary  $15,840
 (To record the closing inventory)   
     
December 31Uncollectible Accounts Expense $1,280 
 Allowance for Doubtful Accounts  $1,280
 (To record the estimated loss on the net credit sale)   
     
December 31Supplies Expense $505 
 Supplies  $505
 (To record the Supplies used)   

Table (1)

 General Journal  Page - 26
DateDescriptionPost Ref.DebitCredit
2019    
December 31Insurance expense $1,200 
 Prepaid Insurance  $1,200
 (To record the prepaid insurance)   
     
December 31Depreciation Expense - Store Equipment $1,000 
 Accumulated Depreciation - Store Equipment  $1,000
 (To record the depreciation on equipment)   
     
December 31Depreciation Expense - Store Fixtures $2,050 
 Accumulated Depreciation - Store Fixtures  $2,050
 (To record the depreciation on equipment)   
     
December 31Interest expense $90 
 Interest Payable  $90
 (To record the interest payable)   
     
December 31Salaries Expense $1,450 
 Salaries Payable  $1,450
 (To record the salaries payable)   
     
December 31Payroll Taxes Expense $192.13 
 Federal Unemployment Tax Payable  $8.70
 State Unemployment Tax Payable  $72.50
 Social Security Tax Payable  $89.90
 Medicare Tax Payable  $21.03
 (To record the taxes on accrued wages)   

Table (2)

2.

To determine

Journalize the closing entries as on December 31, 2019.

2.

Expert Solution
Check Mark

Explanation of Solution

Closing entries: The journal entries prepared to close the temporary accounts to Retained Earnings account are referred to as closing entries. The revenue, expense, and dividends accounts are referred to as temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to permanent account at the end of accounting year.

Pass the closing entries:

 General Journal  Page - 27
DateDescriptionPost RefDebitCredit
2019    
December 31Sales $236,560 
 Purchases Returns and allowances $2,000 
 Income Summary  $238,560
 (To record the closing entry for the income)   
     
December 31Income Summary $47.87 
 PA Capital  $47.87
 (To record the closing entry for the capital)   
     
December 31PA Capital $8,000 
 PA Drawings  $8,000
 (To record the closing entry for the capital)   

Table (3)

 General Journal  Page - 28
DateDescriptionPost RefDebitCredit
2019    
December 31Income Summary $237,367.13 
 Sales Returns and Allowances  $6,000
 Purchases  $160,000
 Rent Expense  $18,000
 Telephone Expense  $2,400
 Salaries Expense  $41,450
 Payroll Taxes Expense  $3,392.13
 Supplies Expense  $505
 Insurance expense  $1,200
 Depreciation Expense - Store Equipment  $1,000
 Depreciation Expense - Store Fixtures  $2,050
 Uncollectible Accounts Expense  $1,280
 Interest Expense  $90
 (To record the closing entry for the expenses)   

Table (4)

3.

To determine

Journalize the reversing entries as on January 1, 2020 and identify the journal entry to be passed if Salaries are paid on January 4, 2020.

3.

Expert Solution
Check Mark

Explanation of Solution

Reversing entries: Reversing entries are those entries which are recorded at the beginning of the year, to reverse or set right the adjusting entries made in the end of the previous accounting year, in order to maintain the records according to accrual basis principle.

Pass the reversing entries:

 General Journal  Page - 29
DateDescriptionPost RefDebitCredit
2020    
January 1Interest Payable $90 
 Interest Expense  $90
 (To record the reversing entry for interest payable)   
     
January 1Salaries Payable $1,450 
 Salaries Expense - Office  $1,450
 (To record the reversing entry for salaries payable)   
     
January 1Social Security Tax Payable $89.90 
 Medicare Tax Payable $21.03 
 Federal Unemployment Tax Payable $8.70 
 State Unemployment Tax Payable $72.50 
 Payroll Taxes Expense  $192.13
 (To record the reversing entry for payroll taxes payable)   

Table (5)

 General Journal  Page - 30
DateDescriptionPost RefDebitCredit
2020    
January 4Salaries Payable $1,450 
 Salaries Expense $1,150 
 Cash  $2,600
 (To record the payment of salaries ignoring the payroll taxes)   

Table (6)

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Chapter 13 Solutions

GEN COMBO COLLEGE ACCOUNTING; CONNECT ACCESS CARD

Ch. 13 - Prob. 2.5SRECh. 13 - At the end of the previous accounting period, an...Ch. 13 - Prob. 1CSRCh. 13 - Prob. 2CSRCh. 13 - Prob. 3CSRCh. 13 - Prob. 4CSRCh. 13 - Which of the following should have a debit balance...Ch. 13 - Prob. 6CSRCh. 13 - Prob. 7CSRCh. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - What are operating expenses?Ch. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQCh. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 14DQCh. 13 - Prob. 15DQCh. 13 - Prob. 16DQCh. 13 - Prob. 17DQCh. 13 - Gomez Company had a current ratio of 2.0 in 2018...Ch. 13 - Prob. 1ECh. 13 - Prob. 2ECh. 13 - The worksheet of Bridgets Office Supplies contains...Ch. 13 - Prob. 4ECh. 13 - Prob. 5ECh. 13 - Prob. 6ECh. 13 - Prob. 7ECh. 13 - The Adjusted Trial Balance section of the...Ch. 13 - Prob. 9ECh. 13 - Prob. 10ECh. 13 - Superior Hardwood Company distributes hardwood...Ch. 13 - Good to Go Auto Products distributes automobile...Ch. 13 - Obtain all data necessary from the worksheet...Ch. 13 - Obtain all data that is necessary from the...Ch. 13 - Prob. 5PACh. 13 - ComputerGeeks.com is a retail store that sells...Ch. 13 - Hog Wild is a retail firm that sells motorcycles,...Ch. 13 - Prob. 3PBCh. 13 - Prob. 4PBCh. 13 - The data below concerns adjustments to be made at...Ch. 13 - Programs Plus is a retail firm that sells computer...Ch. 13 - Teagan Fitzgerald is the owner of Newport Jewelry,...Ch. 13 - Prob. 1MFCh. 13 - Spectrum Company had an increase in sales and net...Ch. 13 - Prob. 3MFCh. 13 - Prob. 4MFCh. 13 - Prob. 5MFCh. 13 - Prob. 6MFCh. 13 - Prob. 7MFCh. 13 - It is standard accounting procedures, or GAAP, to...Ch. 13 - McCormick Company, Incorporated, is a global...Ch. 13 - The Fashion Rack is a retail merchandising...
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