Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 6PB
At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney:
In preparing the financial statements, adjustments for the following data were overlooked:
- • Unbilled fees earned at August 31, $31,900.
- •
Depreciation of equipment for August, $7,500. - • Accrued wages at August 31, $5,200.
- • Supplies used during August, $3,000.
Instructions
- 1.
Journalize the entries to record the omitted adjustments. - 2. Determine the correct amount of net income for August and the total assets, liabilities, and owner’s equity at August 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The first adjustment is presented as an example.
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Hankik Enterprises
Worksheet
For the Year Ended July 31, 2015
Adjusted Trial
Trial Balance
Adjustments
Description
Balance
Debit
Debit
Credit
Credit
Debit
Credit
Cash
36
Prepaid Insurance
12
Fees Receivable
56
Supplies
12
Equipment
60
Accum. Depreciation
12
Uncarned Revenue
20
Accounts Payable
32
Wages Payable
Ramon Hikik, Capital
84
Ramon Hikik,
4
Drawing
Service Revenue
80
Advertising Expense
28
Wage Expense
20
Insurance Expense
Supplies Expense
Depreciation Expense
228
Totals
228
A review of the accounting records of Rundle Manufacturing indicated that the company incurred the following payroll costs during the
month of March. Assume the company's financial statements are prepared in accordance with GAAP.
1. Salary of the company president-$31,400.
2. Salary of the vice president of manufacturing-$16,100.
3. Salary of the chief financial officer-$18,000.
4. Salary of the vice president of marketing-$15,600.
5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant-$204,000.
6. Wages of production workers-$945,000.
7. Salaries of administrative secretaries-$103,000.
8. Salaries of engineers and other personnel responsible for maintaining production equipment-$169,000.
9. Commissions paid to sales staff-$255,000.
Required
a. What amount of payroll cost would be classified as SG&A expense?
b. Assuming that Rundle made 3,300 units of product and sold 2,475 of them during the month of March, determine the amount of
payroll cost…
A review of the accounting records of Baird Manufacturing indicated that the company incurred the following payroll costs during
the month of March. Assume the company's financial statements are prepared in accordance with GAAP.
1. Salary of the company president-$75,000.
2. Salary of the vice president of manufacturing-$50,000.
3. Salary of the chief financial officer-$42,000.
4. Salary of the vice president of marketing-$40,000.
5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant-$147,000.
6. Wages of production workers-$703,500.
7. Salaries of administrative secretaries-$60,000.
8. Salaries of engineers and other personnel responsible for maintaining production equipment-$133,500.
9. Commissions paid to sales staff-$146,000.
Required
a. What amount of payroll cost would be classified as SG&A expense?
b. Assuming that Baird made 5,000 units of product and sold 4,000 of them during the month of March, determine the amount of
payroll cost…
Chapter 3 Solutions
Financial Accounting
Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (a) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - Prob. 7DQCh. 3 - Does every adjusting entry affect net income for a...Ch. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Indicate with a Yes or No whether or not each of...Ch. 3 - Indicate with a Yes or No whether or not each of...Ch. 3 - Classify the following items as (1) prepaid...Ch. 3 - Classify the following items as (1) prepaid...Ch. 3 - The supplies account had a beginning balance of...Ch. 3 - The prepaid insurance account had a beginning...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - Prob. 4PEBCh. 3 - At the end of the current year, 23,570 of fees...Ch. 3 - At the end of the current year, 17,555 of fees...Ch. 3 - We-Sell Realty Co. pays weekly salaries of 11,800...Ch. 3 - Prospect Realty Co. pays weekly salaries of 27,600...Ch. 3 - Prob. 7PEACh. 3 - The estimated amount of depreciation on equipment...Ch. 3 - For the year ending August 31, 2016, Mammalia...Ch. 3 - For the year ending April 30, 2016, Urology...Ch. 3 - For each of the following errors, considered...Ch. 3 - For each of the following errors, considered...Ch. 3 - Prob. 10PEACh. 3 - Prob. 10PEBCh. 3 - Classify the following items as (a) prepaid...Ch. 3 - The following accounts were taken from the...Ch. 3 - The balance in the supplies account, before...Ch. 3 - The supplies and supplies expense accounts at...Ch. 3 - At March 31, the end of the first month of...Ch. 3 - The balance in the prepaid insurance account,...Ch. 3 - The prepaid insurance account had a balance of...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - Prob. 9ECh. 3 - At the end of the current year, 22,650 of fees...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - The adjusting entry for accrued fees was omitted...Ch. 3 - Ocular Realty Co. pays weekly salaries of 16,600...Ch. 3 - Prob. 14ECh. 3 - Accrued salaries owed to employees for October 30...Ch. 3 - Assume that the error in Exercise 3-15 was not...Ch. 3 - Art Imaging Company was organized on April 1 of...Ch. 3 - The estimated amount of depreciation on equipment...Ch. 3 - The balance in the equipment account is...Ch. 3 - Prob. 20ECh. 3 - For a recent period, the balance sheet for Costco...Ch. 3 - Prob. 22ECh. 3 - The accountant for Healthy Life Company, a medical...Ch. 3 - If the net income for the current year had been...Ch. 3 - On December 31, a business estimates depreciation...Ch. 3 - The unadjusted and adjusted trial balances for...Ch. 3 - The accountant for Evas Laundry prepared the...Ch. 3 - The following data (in millions) are taken from...Ch. 3 - Prob. 29ECh. 3 - On March 31, 2016, the following data were...Ch. 3 - Selected account balances before adjustment for...Ch. 3 - Reliable Repairs Service, an electronics repair...Ch. 3 - Good Note Company specializes in the repair of...Ch. 3 - Rowland Company is a small editorial services...Ch. 3 - At the end of April, the first month of...Ch. 3 - Prob. 1PBCh. 3 - Selected account balances before adjustment for...Ch. 3 - Crazy Mountain Outfitters Co., an outfitter store...Ch. 3 - The Signage Company specializes in the maintenance...Ch. 3 - Reece Financial Services Co., which specializes in...Ch. 3 - At the end of August, the first month of...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Daryl Kirby opened Squid Realty Co. on January 1,...Ch. 3 - Prob. 2CPCh. 3 - Prob. 3CP
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