![Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card](https://www.bartleby.com/isbn_cover_images/9781259542169/9781259542169_largeCoverImage.gif)
Concept explainers
TO PREPARE:
Adjusting
![Check Mark](/static/check-mark.png)
Answer to Problem 2BPSB
SOLUTION:
IN THE BOOKS OF NATSU Co. | |||||
JOURNAL ENTRIES | |||||
FOR THE Year Ended 31-October-15 | |||||
Srl No. | PARTICULARS | DEBIT ($) | CREDIT ($) | ||
1 | SUPPLIES EXPENSES A/C | 4,370 | | ||
| TO OFFICE SUPPLIES A/C | | 4,370 | ||
| (Being utilization of office supplies charged as office expenses) | | | ||
2 | INSURANCE EXPENSES - Policy A A/C | 3000 | | ||
| TO PREPAID INSURANCE - A A/C | | 3000 | ||
| (Being current year expired insurance recognized as an expense) | | | ||
| | | |||
3 | INSURANCE EXPENSES - Policy B A/C | 1400 | | ||
| PREPAID INSURANCE - Policy C A/C | 5800 | | ||
| TO CASH A/C | | 7200 | ||
| (Being current year expired insurance recognized as an expense and remaining transfer to prepaid expense as an asset) | | | ||
330 | | ||||
4 | PREPAID INSURANCE - Policy C A/C | 990 | | ||
| TO CASH A/C | | 1320 | ||
| (Being current year expired insurance recognized as an expense and remaining transfer to prepaid expense as an asset) | | | ||
| | | |||
5 | WAGES EXPENSES A/C | 1000 | | ||
| TO ACCRUED WAGES A/C | | 1000 | ||
| (Being wages for 1 days of October recognized) | | | ||
6 | 5400 | | |||
| TO | | 5400 | ||
| (Being depreciation expenses recognized ) | | | ||
7 | RENT RECEIVABLE A/C | 1000 | | ||
| TO RENT EARNED A/C | | 1000 | ||
| (Being rent earned for October were recognized) | | | ||
8 | UNEARNED RENT A/C | 1450 | | ||
| TO RENT EARNED A/C | | 1450 | ||
| (Being rent earned for Sept & Oct recognized as per accrual basis) | | |
Explanation of Solution
- Office supplies that has been used during the year charged as expenses.
- The insurance expense for
adjusting entry 2,3 and 4 is calculated as under − - Wages expenses incurred in current year should be recognized as expenses in current year as per accrual basis of accounting. Hence wages for 1 days (31st October, 2015 should be recognized as the expense of 2015.
- Depreciation has been charged to expenses and Accumulated Depreciation A/c
- Rent earned in December should be recognized as Income in current year as per accrual basis of accounting.
- Income from Rent recognized for the month of September and October, and the Advance liabilities reduced as per the recognition of Income.
Insurance Expenses will be charged as per the number of months expired in year 2015
Policy | Cost | Month | Cost/Month | No of month in year 2015 | Insurance Expenses |
A | 6000 | 24 | 250 | 12 | 3000 |
B | 7200 | 36 | 200 | 7 | 1400 |
C | 1320 | 12 | 110 | 3 | 330 |
Thus, the adjusting Journal Entries for year ended October, 15 have been prepared.
REQUIREMENT 2
TO PREPARE
Journal for cash entries on 7th and 15th November, 15
REQUIREMENT 2
![Check Mark](/static/check-mark.png)
Answer to Problem 2BPSB
SOLUTION
IN THE BOOKS OF NASTU CO. | |||||
JOURNAL ENTRIES | |||||
7-Nov-15 | WAGES EXPENSES A/C | 4000 | | ||
| ACCRUED WAGES A/C | 1000 | | ||
| TO CASH A/C | | 5000 | ||
| (Being wages payment for current and previous year) | | | ||
| | | | ||
15-Nov-15 | CASH A/C | 2000 | | ||
| TO RENT RECEIVABLE A/C | | 1000 | ||
| TO RENT EARNED A/C | | 1000 | ||
| (Being rent received for current and previous year) | | |
Explanation of Solution
The above journal entries are prepared as under −
Jan 06: Wages paid on 7th Nov, 2015 includes the wages of 1 day from the October and 4 days of November, hence the Liabilities reduced for October and Expenses charged for November
The wages are calculated as under −
Given,
For October -
- Accrued Wages for October = $ 1,000
For November, Wages expense −
- Wages for 1 day = $ 1,000
- Number of days in November = 4
Total cash to be paid −
Jan 15: Earned Rent received in November includes the Rent of October also, Hence the Rent receivable reduced and Income Realized as per accrual basis of accounting.
Thus, the journal for cash entries on 6th and 15th January, 16 have been prepared.
Want to see more full solutions like this?
Chapter 3 Solutions
Loose Leaf for Fundamentals of Accounting Principles and Connect Access Card
- What is the amount of the net fixed assets?arrow_forward9 A B C D E 4 Ramsey Miller Style, Inc. manufactures a product which requires 15 pounds of direct materials at a cost of $8 5 per pound and 5.0 direct labor hours at a rate of $17 per hour. Variable overhead is budgeted at a rate of $3 per direct labor hour. Budgeted fixed overhead is $433,000 per month. The company's policy is to end each month with direct materials inventory equal to 45% of the next month's direct materials requirement, and finished 7 goods inventory equal to 60% of next month's sales. August sales were 13,400 units, and marketing expects 8 sales to increase by 500 units in each of the upcoming three months. At the end of August, the company had 9 95,850 pounds of direct materials in inventory, and 8,340 units in finished goods inventory. 10 11 August sales 12 Expected increase in monthly sales 13 Desired ending finished goods (units) 14 Selling price per unit 15 Direct materials per unit 16 Direct materials cost 17 Direct labor hours (DLHS) per unit 18 Direct labor…arrow_forwardSherrod, Incorporated, reported pretax accounting income of $84 million for 2024. The following information relates to differences between pretax accounting income and taxable income: a. Income from installment sales of properties included in pretax accounting income in 2024 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end 2024 had a balance of $4 million (representing portions of 2023 and 2024 installment sales), expected to be collected equally in 2025 and 2026. b. Sherrod was assessed a penalty of $4 million by the Environmental Protection Agency for violation of a federal law in 2024. The fine is to be paid in equal amounts in 2024 and 2025. c. Sherrod rents its operating facilities but owns one asset acquired in 2023 at a cost of $88 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight- line depreciation the…arrow_forward
- Direct materials price variancearrow_forward$ 36,000 204,000 The Drysdale, Koufax, and Marichal partnership has the following balance sheet immediately prior to liquidation: Cash Noncash assets Liabilities Drysdale, loan $ 50,000 10,000 Total assets $ 240,000 Drysdale, capital (50%) Koufax, capital (30%) Marichal, capital (20%) Total liabilities and capital 70,000 60,000 50,000 $ 240,000 Required: a-1. Determine the maximum loss that can be absorbed in Step 1. Then, assuming that this loss has been incurred, determine the next maximum loss that can be absorbed in Step 2. a-2. Liquidation expenses are estimated to be $15,000. Prepare a predistribution schedule to guide the distribution of cash. b. Assume that assets costing $74,000 are sold for $60,000. How is the available cash to be divided? Complete this question by entering your answers in the tabs below.arrow_forwardCalculate GP ratio round answers to decimal placearrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
![Text book image](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)