12th Edition

ISBN: 9781285607047

Author: NEEDLES

Publisher: Cengage Learning

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

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Textbook Question

Chapter 3, Problem 4P

Hertz Limo Service was organized to provide limousine service between the airport and various suburban locations. It has just completed its second year of business. Its trial balance follows.

Chapter 3, Problem 4P, Hertz Limo Service was organized to provide limousine service between the airport and various

The following information is also available:

a. To obtain space at the airport, Hertz paid two years’ rent in advance when it began the business.
b. An examination of insurance policies reveals that $2,800 expired during the year.
c. To provide regular maintenance for the vehicles, Hertz deposited $12,000 with a local garage. An examination of maintenance invoices reveals charges of $10,944 against the deposit.
d. An inventory of spare parts shows $1,902 on hand.
e. Hertz depreciates all of its limousines at the rate of 12.5 percent per year. No limousines were purchased during the year. (Round answer to the nearest dollar.)
f. A payment of $1,500 for one full year’s interest on notes payable is now due.
g. Unearned Passenger Service Revenue on June 30 includes $17,815 for tickets that employers purchased for use by their executives but which have not yet been redeemed.

REQUIRED

1. Determine the adjusting entries and enter them in the general journal (Page 14).
2. Open ledger accounts for the accounts in the trial balance plus the following: Interest Payable (213); Rent Expense (514); Insurance Expense (515); Spare Parts Expense (516); Depreciation Expense—Limousines (517); Maintenance Expense (518); and Interest Expense (519). Record the balances shown in the trial balance.
3. Post the adjusting entries from the general journal to the ledger accounts, showing proper references.
4. Prepare an adjusted trial balance, an income statement, a statement of owner’s equity, and a balance sheet. The owner made no investments during the period.
5. ACCOUNTING CONNECTION ▶ What effect do the adjusting entries have on the income statement?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 3, Problem 3P

Chapter 3, Problem 5P

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Chapter 3 Solutions

Principles of Accounting

Ch. 3 - Prob. 1DQ Ch. 3 - Will the carrying value of a long-term asset...Ch. 3 - If, at the end of the accounting period, you were...Ch. 3 - Prob. 4DQ Ch. 3 - Prob. 5DQ Ch. 3 - Prob. 6DQ Ch. 3 - Match the concepts of accrual accounting that...Ch. 3 - The Prepaid Insurance account began the year with...Ch. 3 - The Supplies account began the year with a balance...Ch. 3 - Prob. 4SE

Ch. 3 - Prob. 5SE Ch. 3 - During the month of August, deposits in the amount...Ch. 3 - Prob. 7SE Ch. 3 - Malesherbes Companys adjusted trial balance on...Ch. 3 - Prob. 9SE Ch. 3 - Prob. 10SE Ch. 3 - Carlos Companys accountant makes the assumptions...Ch. 3 - Four conditions must be met before revenue should...Ch. 3 - Prob. 3EA Ch. 3 - Prob. 4EA Ch. 3 - Prob. 5EA Ch. 3 - Prob. 6EA Ch. 3 - Prob. 7EA Ch. 3 - Prob. 8EA Ch. 3 - Prepare year-end adjusting entries for each of the...Ch. 3 - Prob. 10EA Ch. 3 - Prob. 11EA Ch. 3 - Wipro Companys income statement included the...Ch. 3 - At the end of the first three months of operation,...Ch. 3 - On November 30, the end of the current fiscal...Ch. 3 - Kinokawa Consultants Companys trial balance on...Ch. 3 - Hertz Limo Service was organized to provide...Ch. 3 - At the end of its fiscal year, Berwyn Cleaners...Ch. 3 - Brave Advisors Services trial balance on December...Ch. 3 - Prob. 7P Ch. 3 - Prob. 8P Ch. 3 - Prob. 9AP Ch. 3 - On March 31, the end of the current fiscal year,...Ch. 3 - Lee Technology Corporations trial balance on...Ch. 3 - Prob. 12AP Ch. 3 - Prob. 13AP Ch. 3 - Scoop Consulting Services trial balance on...Ch. 3 - Prob. 15AP Ch. 3 - Prob. 16AP Ch. 3 - Never Flake Company provided a rust-prevention...Ch. 3 - Prob. 2C Ch. 3 - Prob. 3C Ch. 3 - Prob. 4C Ch. 3 - Prob. 5C Ch. 3 - Prob. 6C

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