Explanation 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. Prepare necessary adjusting entries for Company D at the end of 2016, and show the supporting calculations as follows: Date Account Title & Explanation Debit ($) Credit($) December 31, 2016 Salaries expense 2,840 Salaries payable 2,840 (To record the salaries expense accrued at the end of the accounting year) December 31, 2016 Utilities expense 247 Utilities payable 247 (To record the utilities expense accrued at the end of the accounting year) December 31, 2016 Depreciation expense 8,010 Accumulated depreciation – Buildings (1) 2,760 Accumulated depreciation – Equipment (2) 5,250 (To record the depreciation expense incurred at the end of the accounting year) December 31, 2016 Supplies expense 525 Store supplies 128 Office supplies 397 (To record the supplies used during the year) December 31, 2016 Interest receivable 180 Interest revenue (3) 180 (To record the interest revenue earned at the end of the accounting year) December 31, 2016 Bad debts expense (4) 650 Allowance for doubtful accounts 650 (To record the bad debts expense estimated at the end of the accounting year) December 31, 2016 Insurance expense 528 Prepaid insurance 528 (To record the insurance expense incurred at the end of the accounting year) December 31, 2016 Prepaid expense 310 Travel expense 310 (To record the prepaid expense not yet been used) December 31, 2016 Income tax expense (5) 1,788 Income tax payable 1,788 (To record the income tax expense incurred at the end of the accounting year) Table (1) Working note (1): Calculate the depreciation expense on building. Depreciation expense on building } = Cost of building − Residual value Useful life of the assets = $ 78 , 000 − $ 9 , 000 25 years = $ 2 , 760 Working note (2): Calculate the depreciation expense on equipment. Depreciation expense on equipment } = Cost of equipment − Residual value Useful life of the assets = $ 44 , 000 − $ 2 , 000 8 years = $ 5 , 250 Working note (3): Calculate the amount of interest revenue earned

Intermediate Accounting: Reporting and Analysis (Looseleaf)

2nd Edition

ISBN: 9781285453859

Author: WAHLEN

Publisher: Cengage

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Intermediate Accounting: Reporting and Analysis (Looseleaf)

Ch. 3 - What is the primary purpose of an accounting...Ch. 3 - What is the relationship between the accounting...Ch. 3 - Show the expanded accounting equation using the 10...Ch. 3 - Explain and distinguish between a transaction; an...Ch. 3 - Explain how the accounting equation organizes...Ch. 3 - What is the difference between a permanent and a...Ch. 3 - Prob. 7GI Ch. 3 - Why is it advantageous to a company to initially...Ch. 3 - What is a perpetual inventory accounting system?...Ch. 3 - Give examples of transactions that: a. Increase an...

Ch. 3 - Give examples of transactions that: a. Increase...Ch. 3 - Prob. 12GI Ch. 3 - Prob. 13GI Ch. 3 - Prob. 14GI Ch. 3 - Prob. 15GI Ch. 3 - Explain and provide examples of deferrals,...Ch. 3 - Prob. 17GI Ch. 3 - Prob. 18GI Ch. 3 - Prob. 19GI Ch. 3 - Prob. 20GI Ch. 3 - Prob. 21GI Ch. 3 - What are the major financial statements of a...Ch. 3 - Prob. 23GI Ch. 3 - Prob. 24GI Ch. 3 - Prob. 25GI Ch. 3 - Prob. 26GI Ch. 3 - Prob. 27GI Ch. 3 - Prob. 28GI Ch. 3 - Prob. 29GI Ch. 3 - What is cash-basis accounting? What must a company...Ch. 3 - On May 1, Johnson Corporation purchased inventory...Ch. 3 - On January 1, Tolson Company purchased a building...Ch. 3 - On July 1, Friler Company purchased a 1-year...Ch. 3 - Prob. 4RE Ch. 3 - Prob. 5RE Ch. 3 - Prob. 6RE Ch. 3 - Goldfinger Corporation had account balances at the...Ch. 3 - Prob. 8RE Ch. 3 - For the current year, Vidalia Company reported...Ch. 3 - Prob. 10RE Ch. 3 - (Appendix 3.1) Vickelly Company uses cash-basis...Ch. 3 - Financial Statement Interrelationship Draw a...Ch. 3 - Journal Entries Mead Company uses a perpetual...Ch. 3 - Journal Entries The following are selected...Ch. 3 - Adjusting Entries Your examination of Sullivan...Ch. 3 - Adjusting Entries The following are several...Ch. 3 - Adjusting Entries The following partial list of...Ch. 3 - Prob. 7E Ch. 3 - Prob. 8E Ch. 3 - Closing Entries Lloyd Bookstore shows the...Ch. 3 - Prob. 10E Ch. 3 - Prob. 11E Ch. 3 - Prob. 12E Ch. 3 - Prob. 13E Ch. 3 - Special Journals The following are several...Ch. 3 - Prob. 15E Ch. 3 - Prob. 1P Ch. 3 - Prob. 2P Ch. 3 - Prob. 3P Ch. 3 - Prob. 4P Ch. 3 - Errors in Financial Statements At the end of the...Ch. 3 - Journal Entries, Posting, and Trial Balance Luke...Ch. 3 - Effects of Errors: During the current accounting...Ch. 3 - Prob. 8P Ch. 3 - Carolyn Company has prepared the following...Ch. 3 - Prob. 10P Ch. 3 - Prob. 11P Ch. 3 - Comprehensive On November 30, 2016, Davis Company...Ch. 3 - During 2016, Thomas Company entered into two...Ch. 3 - Prob. 14P Ch. 3 - Adjusting Entries At the end of 2016, Richards...Ch. 3 - Prob. 16P Ch. 3 - Prob. 17P

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