Loose Leaf For Fundamentals Of Financial Accounting

6th Edition

ISBN: 9781260159547

Author: Phillips Associate Professor, Fred, Libby, Robert, Patricia

Publisher: McGraw-Hill Education

See similar textbooks

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…

Videos

Textbook Question

Chapter 4, Problem 16E

Recording Four Adjusting Journal Entries and Preparing an Adjusted Trial Balance

Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations ending December 31.

Account Titles	Debit	Credit
Cash	$ 38
Accounts Receivable	9
Prepaid Insurance	6
Equipment	80
Accumulated Depreciation		$ 0
Accounts Payable		9
Common Stock		76
Retained Earnings		4
Sales Revenue		80
Insurance Expense	0
Salaries and Wages Expense	10
Supplies Expense	26
Totals	$169	$169

Other data not yet recorded at December 31:

a. Insurance expired during the year, $5.
b. Depreciation expense for the year, $4.
c. Salaries and wages payable, $7.
d. Income tax expense, $9.

Required:

1. Prepare the adjusting journal entries for the year ended December 31.
2. Using T-accounts, determine the adjusted balances in each account and prepare an adjusted trial balance as of December 31.
3. By what amount would net income have been understated or overstated had the adjusting journal entries not been recorded?

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 4, Problem 15E

Chapter 4, Problem 17E

Students have asked these similar questions

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $10 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is not operating at full capacity and is able to supply the Deodorant Division with its needs for the chemical, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $10.00 per ounce $6.00 per ounce $15.00 per ounce $3.00 per ounce

Brar Incorporated supplied the following financial information for analysis: Depreciable assets (purchased at the beginning of year 1) $ 4,500,000 Profits before depreciation (all in cash flows at end of year): Year 1 960,000 Year 2 1,400,000 Year 3 2,100,000 Replacement cost of depreciable assets at end of: Year 1 $ 5,000,000 Year 2 6,200,000 Year 3 7,600,000 The assets are depreciated at a rate of 12% per year and have no salvage value. What is the ROI for year 2 using historical cost, net book value? Multiple Choice 26.60% 24.72% 25.15% 22.64% None of these.

Bella Brands operates with two divisions, Aftershave and Deodorant. The Aftershave Division produces a chemical that the Deodorant Division also uses. The Aftershave Division also sells this chemical to other firms for $27 per ounce. The cost information for the Aftershave Division is as follows: Variable costs per ounce $ 6.00 Fixed costs per ounce $ 15.00 Monthly production capacity 30,000 ounces If the Aftershave Division is operating at full capacity and can sell all of the chemical that it can produce, what is the minimum transfer price that the Aftershave Division will accept? Multiple Choice None of the choices is correct. $6.00 per ounce $21.00 per ounce $15.00 per ounce $27.00 per ounce

Chapter 4 Solutions

Loose Leaf For Fundamentals Of Financial Accounting

Ch. 4 - Prob. 1Q Ch. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - What is a contra-asset? Give an example of one.Ch. 4 - Explain the differences between depreciation...Ch. 4 - What is an adjusted trial balance? What is its...Ch. 4 - On December 31, a company makes a 59,000 payment...Ch. 4 - Using the information in question 8, determine the...Ch. 4 - Using the information in question 8, prepare the...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Solution Summary: The author explains how to prepare the adjusting journal entries for the year ended 31 st December.

Concept explainers

Videos

Want to see the full answer?

Chapter 4 Solutions