Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 3, Problem 14E
Preparing
For each of the following separate cases, prepare the required December 31 year-end adjusting entries. Entries can draw from this partial chart of
a. Depreciation on the company's wind turbine equipment for the year is $5,000.
b. The Prepaid Insurance account for the solar panels had a $2,000 debit balance at December 31 before adjusting for the costs of any expired coverage. Analysis of prepaid insurance shows that $600 of unexpired insurance coverage remains at year-end.
c. The company received $3,000 cash in advance for sustainability consulting work. As of December 31, one-third of the sustainability consulting work had been performed.
d. As of December 31, $1,200 in wages expense for the organic produce workers have been incurred but not yet paid.
e. As of December 31, the company has earned, but not yet recorded, $400 of interest revenue from investments in socially responsible bonds. The interest revenue is expected to be received on January 12.
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Which of the following entries is necessary to close the appropriate depreciation account at the end of the year?
A. debit Accumulated Depreciation and credit Income Summary
B. debit Depreciation Expense and credit Income Summary
C. debit Income Summary and credit Depreciation Expense
○ D. debit Income Summary and credit Accumulated Depreciation
tasks will provide further exposure to the year-end adjustments.
5.17.1 Enter the following year-end adjustments under the headings i
The first one has been done for you as an example. The year-end is 28 February
interest on capital
Ve covered some of these adjustments. Subsequent
The previous
iation accounts
Revision of adjustments & accounting equation
covered in Grade 10
TASK 5.17
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Required:
the table below.
20.7.
GAAP
Account debited
Account credited
Name of
No. Description
Amount
Name of
concept
applicable
Section in
Section in
account
ledger
account
ledger
1. Correction of Business
entity rule
Drawings
Balance
Sheet
Sundry
Nominal
R3 000
expenses
error
following:
5472 For each of the adjustments indicate the effect on the accounting equation
A = 0 + L.
Information:
166750
in the ratio
1.
Correction of error:
The owner took stock for personal use at cost price, R3 000, but this has been deb-
ited to Sundry expenses.
2.
Omission:
A direct electronic…
Concept Introduction:
Adjusting entries are required to adjust the accounts according to the accrual basis of accounting at the end of the every accounting period. For example: Recording the depreciation expense on depreciable assets at the end of each accounting year.
The business activity for each type of adjusting entry is explained as follows:
Accrued revenue: The adjusting entry for Accrued revenue is prepared to record the revenue earned during the period.
Accrued Expense: The adjusting entry for Accrued expense is prepared to record the expenses incurred during the period.
Deferred Revenue: The adjusting entry for Deferred revenue is prepared to defer the revenue that belong to next period.
Deferred expenses: The adjusting entry for Deferred expense is prepared to defer the expense that belong to next period.
Depreciation: The adjusting entry for depreciation expense is prepared to record the depreciation expense that belong to current period.
Requirement-1:
To prepare:
The…
Chapter 3 Solutions
Principles of Financial Accounting.
Ch. 3 - Prob. 1MCQCh. 3 - Prob. 2MCQCh. 3 - Prob. 3MCQCh. 3 - Prob. 4MCQCh. 3 - Prob. 5MCQCh. 3 - What is the difference between the cash basis and...Ch. 3 - Prob. 2DQCh. 3 - What type of business is most likely to select a...Ch. 3 - What is a prepaid expense and where is it reported...Ch. 3 - What type of assets requires adjusting entries to...
Ch. 3 - What contra account is used when recording and...Ch. 3 - Prob. 7DQCh. 3 - If a company initially records prepaid expenses...Ch. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Samsung Assume Samsung has unearned revenue. What...Ch. 3 - Prob. 12DQCh. 3 - Question: QUICK STUDY Periodic reporting C1 Choose...Ch. 3 - Prob. 2QSCh. 3 - Identifying accounting adjustments Classify the...Ch. 3 - Prob. 4QSCh. 3 - Prepaid (deferred) expenses adjustments For each...Ch. 3 - Prob. 6QSCh. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Accrued expenses adjustments For each separate...Ch. 3 - Prob. 13QSCh. 3 - Accrued revenues adjustments For each separate...Ch. 3 - Prob. 15QSCh. 3 - Prob. 16QSCh. 3 - Preparing an adjusted trial balance P5 Following...Ch. 3 - Prob. 18QSCh. 3 - Prob. 19QSCh. 3 - Prob. 20QSCh. 3 - Prob. 21QSCh. 3 - Prob. 22QSCh. 3 - Prob. 1ECh. 3 - Classifying adjusting entries P1 P2 P3 P4 In the...Ch. 3 - Question: Adjusting and paying accrued wages P3...Ch. 3 - Question: Determining cost flows through accounts...Ch. 3 - Prob. 5ECh. 3 - Preparing adjusting entries P1 P2 P3 Prepare...Ch. 3 - Prob. 7ECh. 3 - Analyzing and preparing adjusting entries P5...Ch. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Question: Computing and interpreting profit margin...Ch. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Preparing adjusting entries P1 P2 P3 P4 For each...Ch. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Prob. 4APCh. 3 - Prob. 5APCh. 3 - Prob. 1BPCh. 3 - Prob. 2BPCh. 3 - Prob. 3BPCh. 3 - Prob. 4BPCh. 3 - Prob. 5BPCh. 3 - Question: SERIAL PROBLEM Business Solutions P1 P2...Ch. 3 - Prob. 1AACh. 3 - Prob. 2AACh. 3 - Prob. 3AACh. 3 - Question: TAKING IT TO THE NET A1 Access EDGAR...
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- Prepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data. A. depreciation on fixed assets, $ 8,500 B. unexpired prepaid rent, $12,500 C. remaining balance of unearned revenue, $555arrow_forwardUsing the following information, A. Make the December 31 adjusting journal entry for depreciation. B. Determine the net book value (NBV) of the asset on December 31. Cost of asset, $195,000 Accumulated depreciation, beginning of year, $26,000 Current year depreciation, $13,000arrow_forwardInstruction: Using the asset method, prepare the original entry of the transaction and the necessary adjusting entry at the end of the accounting period. Dec. 31, 2019arrow_forward
- Subject: acountingarrow_forwardprovide the answer for question 6 and 7arrow_forwardAdjustment for Depreciation The estimated amount of depreciation on equipment for the current year is $2,630. Journalize the adjusting entry to record the depreciation. If an amount box does not require an entry, leave it blank.arrow_forward
- Prepare adjusting journal entries for the year ended (date of) December 31 for each of these separate situations. Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Prepaid Rent; Equipment; Accumulated Depreciation—Equipment; Wages Payable; Unearned Revenue; Revenue; Wages Expense; Supplies Expense; Insurance Expense; Rent Expense; and Depreciation Expense—Equipment. a. Depreciation on the company’s equipment for the year is computed to be $18,000. b. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $1,100 of unexpired insurance coverage remains. c. The Supplies account had a $700 debit balance at the beginning of the year; and $3,480 of supplies were purchased during the year. The December 31 physical count showed $300 of supplies available. d. Two-thirds of the work related to…arrow_forwardClassify the following adjusting entries as involving prepaid expenses (PE), unearned revenues (UR),accrued expenses (AE), or accrued revenues (AR). To record annual depreciation expense.arrow_forwardPrepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data. depreciation on fixed assets, $8,500 unexpired prepaid rent, $12,500 remaining balance of unearned revenue, $555arrow_forward
- vd subject-Accounting EnviroWaste’s year-end is December 31. The information in (a) to (e) is available at year-end for the preparation of adjusting entries: Of the $17,600 balance in Unearned Revenue, $2,600 remains unearned. The annual building depreciation is $13,700. The Spare Parts Inventory account shows an unadjusted balance of $1,020. A physical count reveals a balance on hand of $890. Unbilled and uncollected services provided to customers totalled $13,700. The utility bill for the month of December was received but is unpaid; $1,200. The accrued revenues of $13,700 recorded in (d) were collected on January 4, 2024. The $1,200 utility bill accrued in (e) was paid on January 14, 2024. Required: Prepare the required adjusting entries at December 31, 2023, for (a) to (e) and the subsequent cash entries required for (f) and (g).arrow_forwardShow all calculation notes a. Prepare the adjusting entry to account for the depreciation of the company's building and fixtures during December b. Prepare the adjusting entry to report the portion of unearned customer deposits that were earned during December c. Prepare the adjusting entry to account for income tax expense that accrued during Decemberarrow_forwardQuestion. A company made an error in calculating and reporting amortization expense in Year 1. The error was discovered in Year 2. The item should be reported as a prior period adjustment: a. on the Year 2 statement of retained earnings. b. on the Year 1 statement of retained earnings. c. accounted for with a cumulative "catch-up" adjustment in Year 2. d. on the Year 2 income statement. e. on the Year 1 income statement.arrow_forward
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