9th Edition

ISBN: 9781260029901

Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher: McGraw-Hill Education

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

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Textbook Question

Chapter 2, Problem 2.5P

Adjusting entries

• LO2–5

Howarth Company’s fiscal year-end is December 31. Below are the unadjusted and adjusted trial balances for December 31, 2018.

Chapter 2, Problem 2.5P, Adjusting entries LO25 Howarth Companys fiscal year-end is December 31. Below are the unadjusted

Required:

Prepare the adjusting journal entries that were recorded at December 31, 2018.

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Chapter 2, Problem 2.4P

Chapter 2, Problem 2.6P

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The following errors took place in journalizing and posting transactions:a. The payment of $3,125 from a customer on account was recorded as a debit to Cash and a credit toAccounts Payable.b. Advertising expense of $1,500 paid for the current month was recorded as a debit to MiscellaneousExpense and a credit to Advertising Expense.c. The purchase of supplies of $2,690 on the account was recorded as a debit to Office Equipment anda credit to Supplies.d. The receipt of $3,750 for services rendered was recorded as a debit to Accounts Receivable and acredit to Fees Earned.Required:Prepare journal entries to correct the errors.Each error correction carries equal marks.

Required:a) Journalize the following transactions using the direct write-off method of accounting foruncollectible receivables:Aug. 7. Received $175 from Roosevelt McLair and wrote off the remainder owed of $400 asuncollectible.Nov. 23. Reinstated the account of Roosevelt McLair and received $400 cash in full payment.b) Journalize the following transactions using the allowance method of accounting for uncollectiblereceivables:Feb. 12. Received $750 from Manning Wingard and wrote off the remainder owed of $2,000 asuncollectible.June 30. Reinstated the account of Manning Wingard and received $2,000 cash in full payment.Each journal carries equal marks

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Chapter 2 Solutions

Loose Leaf Intermediate Accounting

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Adjusting entries • LO2–5 Howarth Company’s fiscal year-end is December 31. Below are the unadjusted and adjusted trial balances for December 31, 2018. Required: Prepare the adjusting journal entries that were recorded at December 31, 2018.

Solution Summary: The author explains the accounting rules for journal entries to correct or adjust the revenue and expense accounts, to concede with the accrual principle of accounting.

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Chapter 2 Solutions