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Concept explainers
1.
Adjusting entries are those entries which are made at the end of the accounting period, to record the revenues in the period of which they have been earned and to record the expenses in the period of which have been incurred, as well as to update all the balances of assets and liabilities accounts on the
Accounting rules for
- To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
- To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.
Accrued expenses:
Accrued expenses are the expenses that have been incurred but have not been paid yet. These accrued expenses create accrued liabilities. For the portion of payment made, accrued liabilities would be reduced by way of passing an adjusting entry.
To prepare: The adjusting entries for accrued salaries on December 31.
2.
To
3.
To record: The journal entries for the payment of salaries made on January 5.
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Chapter 3 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
- Please solve this problemarrow_forwardGary receives $51,000 worth of Quantro, Inc., common stock from his late grandmother's estate. Early in the year, he receives a $250 cash dividend. Four months later, he received a 2% stock dividend. Near the end of the year, Gary sells the stock for $55,000. Due to these events only, how much must Gary include in his gross income for the year?arrow_forwardTechTools has a standard of 1.8 pounds of materials per unit, at $3.50 per pound. In producing 2,500 units, TechTools used 4,700 pounds of materials at a total cost of $16,450. TechTools' materials quantity variance is _.helparrow_forward
- Boss corporation provides the following data from its 2022 financial statementsarrow_forwardABC general accountingarrow_forwardCarter Company disposed of an asset at the end of the eighth year of its estimated life for $16,000 cash. The asset's life was originally estimated to be 10 years. The original cost was $85,000 with an estimated residual value of $8,500. The asset was being depreciated using the straight-line method. What was the gain or loss on the disposal? Questionarrow_forward
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