Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 2.8P
• LO2–5
Excalibur Corporation sells video games for personal computers. The unadjusted
| Account Title | Debits | Credits |
| Cash | 23,300 | |
| 32,500 | ||
| Supplies | –0– | |
| Prepaid rent | –0– | |
| Inventory | 65,000 | |
| Office equipment | 75,000 | |
| 10,000 | ||
| Accounts payable | 26,100 | |
| Salaries and wages payable | 3,000 | |
| Note payable | 30,000 | |
| Common stock | 80,000 | |
| 16,050 | ||
| Sales revenue | 180,000 | |
| Cost of goods sold | 95,000 | |
| Interest expense | –0– | |
| Salaries and wages expense | 32,350 | |
| Rent expense | 14,000 | |
| Supplies expense | 2,000 | |
| Utility expense | 6,000 | |
| Totals | 345,150 | 345,150 |
Information necessary to prepare the year-end adjusting entries appears below.
1. The office equipment was purchased in 2016 and is being
2. Accrued salaries and wages at year-end should be $4,500.
3. The company borrowed $30,000 on September 1, 2018. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.
5. Prepaid rent at year-end should be $1,000.
Required:
Prepare the necessary December 31, 2018, adjusting entries.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Question 5
!
Required information
Problem 6-3B Record transactions and prepare a partial income statement using a perpetual inventory
system (LO6-2, 6-5)
[The following information applies to the questions displayed below.]
At the beginning of June, Circuit Country has a balance in inventory of $2,450. The following transactions occur during the
month of June.
2 Purchase radios on account from Radio World for $2,150, terms 2/15, n/45.
4 Pay cash for freight charges related to the June 2 purchase from Radio World, $290.
8 Return defective radios to Radio World and receive credit, $300.
June
June
June
June 10 Pay Radio World in full.
June 11 Sell radios to customers on account, $3,900, that had a cost of $2,650.
June 18 Receive payment on account from customers, $2,900.
June 20 Purchase radios on account from Sound Unlimited for $3,250, terms 2/10, n/30.
June 23 Sell radios to customers for cash, $4,750, that had a cost of $3,050.
June 26 Return damaged radios to Sound Unlimited and receive credit…
sd
Subject - Accounting
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2016 (unless otherwise indicated), are as follows: During May, the last month of the fiscal year, the following transactions were completed: May 1. Paid rent for May, 5,000. 3. Purchased merchandise on account from Martin Co., terms 2/10, n/30, FOB shipping point, 36,000. 4. Paid freight on purchase of May 3, 600. 6. Sold merchandise on account to Korman Co., terms 2/10, n/30, FOB shipping point, 68,500. The cost of the merchandise sold was 41,000. 7. Received 22,300 cash from Halstad Co. on account. 10. Sold merchandise for cash, 54,000. The cost of the merchandise sold was 32,000. 13. Paid for merchandise purchased on May 3. 15. Paid advertising expense for last half of May, 11,000. 16. Received cash from sale of May 6. 19. Purchased merchandise for cash, 18,700. 19. Paid 33,450 to Buttons Co. on account. 20. Paid Korman Co. a cash refund of 13,230 for returned merchandise from sale of May 6. The invoice amount of the returned merchandise was 13,500 and the cost of the returned merchandise was 8,000. Record the following transactions on Page 21 of the journal: 20. Sold merchandise on account to Crescent Co., terms 1/10, n/30, FOB shipping point, 110,000. The cost of the merchandise sold was 70,000. 21. For the convenience of Crescent Co., paid freight on sale of May 20, 2,300. 21. Received 42,900 cash from Gee Co. on account. May 21. Purchased merchandise on account from Osterman Co., terms 1/10, n/30, FOB destination, 88,000. 24. Returned of damaged merchandise purchased on May 21, receiving a credit memo from the seller for 5,000. 26. Refunded cash on sales made for cash, 7,500. The cost of the merchandise returned was 4,800. 28. Paid sales salaries of 56,000 and office salaries of 29, 000. 29. Purchased store supplies for cash, 2,400. 30. Sold merchandise on account to Turner Co., terms 2/10, n/30, FOB shipping point, 78,750. The cost of the merchandise sold was 47,000. 30. Received cash from sale of May 20 plus freight paid on May 21. 31. Paid for purchase of May 21, less return of May 24. Instructions 1. Enter the balances of each of the accounts in the appropriate balance column of a four-column account. Write Balance in the item section, and place a check mark () in the Posting Reference column. Journalize the transactions for July, starting on Page 20 of the journal. 2. Post the journal to the general ledger, extending the month-end balances to the appropriate balance columns after all posting is completed. In this problem, you are not required to update or post to the accounts receivable and accounts payable subsidiary ledgers. 3. Prepare an unadjusted trial balance. 4. At the end of May, the following adjustment data were assembled. Analyze and use these data to complete (5) and (6). f. The adjustment for customer returns and allowances is 60,000 for sales and 35,000 for cost of merchandise sold. 5. (Optional) Enter the unadjusted trial balance on a IO-column end-of-period spreadsheet (work sheet), and complete the spreadsheet. 6. Journalize and post the adjusting entries. Record the adjusting entries on Page 22 of the journal. 7. Prepare an adjusted trial balance. 8. Prepare an income statement, a statement of owners equity, and a balance sheet. 9. Prepare and post the closing entries. Record the closing entries on Page 23 of the journal. Indicate closed accounts by inserting a line in both the Balance columns opposite the closing entry. Insert the new balance in the owners capital account. 10. Prepare a post-closing trial balance.arrow_forwardHomework Question 10 of 11 Account Titles and Explanation Pharoah Company buys merchandise on account from Shamrock Company. The selling price of the goods is $1,385 and the cost of the goods sold is $650. Both companies use perpetual inventory systems. Journalize the transactions on the books of both companies. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Pharoah Shamrock (To record sale of merchandise) -/1 Debit = Credit :arrow_forwardPlease help me with show all calculation thankuarrow_forward
- 8:36 1 2. The estimated cost of the inventory sold this year and expected to be returned by customers next year is $5,900. Open T accounts and enter the balances for the above accounts. Make appropriate adjustments to the T accounts. Answer | E 14-11A Journalize Adjusting Entry for Inventory Shrinkage: Perpetual Inventory System (LO5) On December 31, Anup Enterprises completed a physical count of its inventory. Although the merchandise inventory account shows a balance of $350,000, the physical count comes to $325,000. Prepare the appropriate adjusting entry under the perpetual inventory system. Series A Problems P 14-12A Preparation of Adjustments on a Spreadsheet for a Merchandising Business: Periodic Method (LO1/2/3/4) The trial balance for the Venice Beach Kite Shop, a business owned by Molly Young is shown belowon page 552. Year-end adjustment information is as follows: (a, A physical count shows that merchandise b) inventory costing $85,000 is on hand as of December 31, 20--. (c,…arrow_forwardExercise 1 The following were selected from among the transactions completed by Greco Co. during the current year. Greco Co. sells and installs home and business security systems. It uses the periodic inventory system and the allowance method in accounting for its uncollectible accounts receivables. Loaned P6,000 cash to Mark Tift, receiving a 90-day, 8% note. Jan 08 Feb 12 Purchased merchandise on account from Gwyn Co., list price P25,000. Trade discount 5%. Terms: 2/10, n/60. Mar 20 Wrote off a P1,000 account from Rodel Co as uncollectible. Apr 03 Sold merchandise on account to Messina and Son, P18,000. Terms: 3/5, 2/10, 1/15, n/45. Apr 08 Mark Tift dishonored the note. Apr 13 Issued a 60-day, 12% note for the Feb 12 transaction. Accepted a 30-day, 12% note for the Apr 03 transaction. May 18 Jun 07 Received from Mark Tift the amount owed on the dishonored note, plus interest from the date the note was dishonored until the payment date at 10% on the maturity value of the note. Settled…arrow_forwardRequired information Problem 9-1A (Algo) Short-term notes payable transactions and entries LO P1 (The following information applies to the questions displayed below.) Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $38,000 of merchandise on credit from Locunt, terma n/3D. Kay 19 Replaced the Apri1 20 account payable to Locust with a 90-day, 8, $35,000 note payable along with paying $3,000 in canh. July 8 Borrowed $60,000 canh from KBR Bank by signing a 120-day, 10, 560, 000 note payable. Paid the amount due on the note to Locunt at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. Noveaber 28 Borroved $33,000 caah from Pargo Bank by signing a 60-day, 7, $33,00o note payable. Decenber 31 Recorded an adjunting entry for accrued interest on the note to Targo Bank. Year 2 Paid the anount due on the note to Pargo Bank at the naturity date. Problem 9-1A (Algo) Part 4 4. Determine the…arrow_forward
- Book Hint Ask Print References Mc Graw Hill % 5 At December 31, Folgeys Coffee Company reports the following results for its calendar year. $908,000 308,000 Cash sales Credit sales Its year-end unadjusted trial balance includes the following items. T Accounts receivable Allowance for doubtful accounts Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be (1) 3% of credit sales, (2) 1 total sales and (3) 6% of year-end accounts receivable. View transaction list Journal entry worksheet prt sc ← ] delete backspace home num lockarrow_forwardKimmel, Financial Accounting, Se Help I System Announcements CA Brief Exercise 10-3 penspan Supply does not segregate sales and sales taxes at the time of sale. The register total for March 16 is $13,375. All sales are subject to a 7% sales tax Compute sales taxes payable. Sales taxes payable %24 Hake the entry to record sales taxes payable and sales. (Credit account titles are automatically indented when amount is entered. Do not indent manual Date Account Titles and Explanation Debit Credit Mar. 16 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS INK TO TEXT INTERACTIVE TUTORIAL Question Attempts: 0 of 3 usedarrow_forward! Required information Problem 11-1A (Algo) Short-term notes payable transactions and entries LO P1 [The following information applies to the questions displayed below.] Tyrell Company entered into the following transactions involving short-term liabilities. Year 1 April 20 Purchased $38,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 9%, $35,000 note payable along with paying $3,000 in cash. July 8 Borrowed $60,000 cash from NBR Bank by signing a 120-day, 11%, $60,000 note payable. _?____Paid the amount due on the note to Locust at the maturity date. Paid the amount due on the note to NBR Bank at the maturity date. November 28 Borrowed $24,000 cash from Fargo Bank by signing a 60-day, 8%, $24,000 note payable. December 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. Year 2 _______ Paid the amount due on the note to Fargo Bank at the maturity date. Problem 11-1A (Algo) Part 3 3.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Accounting (Text Only)AccountingISBN:9781285743615Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Accounting (Text Only)
Accounting
ISBN:9781285743615
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License