Adjusting entries 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 balance sheet, and to ascertain accurate amount of net income (loss) on the income statement to maintain the records according to the accrual basis principle. Accounting rules for journal entries: 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. To open: T-account for each account of AMU Company using unadjusted balances.

Question

Want to see the full answer?

Answer 1

Question

Chapter 3, Problem 3.25E

(1)

To determine

Adjusting entries

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 balance sheet, and to ascertain accurate amount of net income (loss) on the income statement to maintain the records according to the accrual basis principle.

Accounting rules for journal entries:

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.

To open: T-account for each account of AMU Company using unadjusted balances.

(2)

To determine

To prepare: Adjusting entries at December 31, 2018.

(3)

To determine

To Post: The above adjustments to the respective T-account.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

In a recent year, Adobe Inc. reports net income of $4,756 million. Its stockholders’ equity is $14,051 million and $14,797 million at the start and end of the fiscal year, respectively. a. Compute its return on equity (ROE) for the year. Round answers to the nearest whole dollar amount. Numerator Denominator Result Return on equity Answer 1 Answer 2 b. Adobe repurchased $6,550 million of its common stock during the year. Did this repurchase increase or decrease ROE? NOTE: Assume there was no change in net income related to the stock repurchase. c. If Adobe had not repurchased common stock during the year, what would ROE have been? Note: Enter answer as a percentage rounded to the nearest one decimal place (ex: 24.8%).

Computing Return on Assets and Applying the Accounting Equation Nordstrom Inc. reports net income of $564 million for a recent fiscal year. At the beginning of that fiscal year, Nordstrom had $8,115 million in total assets. By fiscal year end, total assets had decreased to $7,886 million. What is Nordstrom’s ROA? Note: Enter answer as a percentage rounded to the nearest 2 decimal places (ex: 24.58%). ROA Answer

Computing and Interpreting Financial Statement RatiosFollowing are selected ratios of Norfolk Southern. Return on Assets (ROA) Component FY4 FY3 Profitability (Net income/Sales) 25.7% 27.0% Productivity (Sales/Average assets) 0.329 0.291 a. Was the company profitable in FY4? Answer 1b. In which year was the company more profitable? Answer 2c. Is the change in productivity a positive or negative development? Answer 3d. Compute the company’s ROA for both years. Note: Enter your answer as a percentage rounded to one decimal place (Ex: 29.4%).FY4 Answer 4%FY3 Answer 5%e. From the information, which of the following best explains the change in ROA during FY4?