FUNDAMENTALS OF FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781260664386
Author: PHILLIPS, LIBB
Publisher: MCG
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Chapter 4, Problem 20ME
To determine
To prepare: The adjusting
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Adjustment for Insurance
On December 1, a six-month liability insurance policy was purchased for $900.
Analyze the required adjustment as of December 31 using T accounts, and then formally enter this adjustment in the general journal. (Trial balance is abbreviated as TB.)
On July 1, a six-month liability insurance policy was purchased for $750.
Required:
Analyze the required adjustment as of July 31 using T accounts, and then formally enter
this adjustment in the general journal. (Trial balance is abbreviated TB.)
On July 1, 2022, Pharoah Company pays $14,384 to Carla Vista Co. for a 2-year insurance contract. Both companies have fiscal years
ending December 31.
For Pharoah Company, journalize the entry on July 1 and the annual adjusting entry on December 31. (Record journal entries in
the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not
indent manually.)
Date
Account Titles and Explanation
Debit
Credit
July 1
Dec. 31
Chapter 4 Solutions
FUNDAMENTALS OF FINANCIAL ACCOUNTING
Ch. 4 - Prob. 1QCh. 4 - Explain the relationships between adjustments and...Ch. 4 - Prob. 3QCh. 4 - Prob. 4QCh. 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...
Ch. 4 - What is the equation for each of the following...Ch. 4 - Prob. 12QCh. 4 - What is the purpose of closing journal entries?Ch. 4 - Prob. 14QCh. 4 - Prob. 15QCh. 4 - What is a post-closing trial balance? Is it a...Ch. 4 - The owner of a local business complains that the...Ch. 4 - Which of the following accounts would not appear...Ch. 4 - Which account is least likely to appear in an...Ch. 4 - When a concert promotions company collects cash...Ch. 4 - On December 31, an adjustments made to reduce...Ch. 4 - An adjusting journal entry to recognize accrued...Ch. 4 - Prob. 6MCCh. 4 - Company A has owned a building for several years....Ch. 4 - Which of the following trial balances is used as a...Ch. 4 - Assume the balance in Prepaid Insurance is 2,500...Ch. 4 - Assume a company receives a bill for 10,000 for...Ch. 4 - Prob. 1MECh. 4 - Understanding Concepts Related to Adjustments...Ch. 4 - Matching Transactions with Type of Adjustment...Ch. 4 - Recording Adjusting Journal Entries Using the...Ch. 4 - Determine Accounting Equation Effects of Deferral...Ch. 4 - Prob. 6MECh. 4 - Determining Accounting Equation Effects of Accrual...Ch. 4 - Recording Adjusting Journal Entries Using be...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral...Ch. 4 - Preparing Journal Entries for Deferral and Accrual...Ch. 4 - Reporting Adjusted Account Balances Indicate...Ch. 4 - Preparing an Adjusted Trial Balance Macro Company...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Reporting a Statement of Retained Earnings Refer...Ch. 4 - Prob. 16MECh. 4 - Recording Closing Journal Entries Refer to the...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Prob. 20MECh. 4 - Prob. 21MECh. 4 - Prob. 22MECh. 4 - Prob. 23MECh. 4 - Prob. 24MECh. 4 - Prob. 25MECh. 4 - Prob. 26MECh. 4 - Prob. 1ECh. 4 - Identifying Adjustments and Preparing Financial...Ch. 4 - Prob. 3ECh. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Recording Adjusting Journal Entries Refer to E4-6....Ch. 4 - Recording Typical Adjusting Journal Entries...Ch. 4 - Determining Accounting Equation Effects of Typical...Ch. 4 - Determining Adjusted Income Statement Account...Ch. 4 - Reporting Depreciation The adjusted trial balance...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Analyzing the Effects of Adjusting Journal Entries...Ch. 4 - Reporting an Adjusted Income Statement Dyer, Inc.,...Ch. 4 - Recording Adjusting Entries and Preparing an...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Recording Four Adjusting Journal Entries and...Ch. 4 - Prob. 18ECh. 4 - Analyzing, Recording, and Summarizing Business...Ch. 4 - Preparing Adjusting Entries, an Adjusted Trial...Ch. 4 - Preparing an Adjusted Trial Balance, Closing...Ch. 4 - Analyzing and Recording Adjusting Journal Entries...Ch. 4 - Prob. 3CPCh. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Analyzing and Recording Adjusting Journal Entries...Ch. 4 - Prob. 3PACh. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Recording Adjusting Journal Entries Cactus...Ch. 4 - Determining Accounting Equation Effects of...Ch. 4 - Identifying and Preparing Adjusting Journal...Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 2COPCh. 4 - Recording Transactions (Including Adjusting...Ch. 4 - From Recording Transactions (Including Adjusting...Ch. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 6COPCh. 4 - Finding Financial Information Refer to the...Ch. 4 - Prob. 2SDCCh. 4 - Ethical Decision Making: A Mini-Case Assume you...Ch. 4 - Adjusting the Accounting Records Assume it is now...
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- If the Prepaid Insurance account had a balance of $12,000, representing one years policy premium, which was paid on July 1, what entry would be needed to adjust the Prepaid Insurance account at the end of December, before preparing the financial statements?arrow_forwardPrepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data. A. amount due for employee salaries, $4,800 B. actual count of supplies inventory, $ 2,300 C. depreciation on equipment, $3,000arrow_forwardReviewing insurance policies revealed that a single policy was purchased on August 1, for one year’s coverage, in the amount of $6,000. There was no previous balance in the Prepaid Insurance account at that time. Based on the information provided: Make the December 31 adjusting journal entry to bring the balances to correct. Show the impact that these transactions had on the Prepaid Insurance account by starting with the beginning balance and ending with the ending balance in the account.arrow_forward
- Adjustment for Insurance On December 1, a six-month liability insurance policy was purchased for $900. Analyze the required adjustment as of December 31 using T accounts, and then formally enter this adjustment in the general journal. (Trial balance is abbreviated as TB.) (Balance Sheet)Prepaid Insurance fill in the blank a8cfc50a8015fe0_2 fill in the blank a8cfc50a8015fe0_4 Bal. fill in the blank a8cfc50a8015fe0_5 (Income Statement)Insurance Expense Adj. fill in the blank a8cfc50a8015fe0_6 Page: DATE ACCOUNT TITLE DOC.NO. POST.REF. DEBIT CREDIT 1 20--Dec. 31 fill in the blank 59564e01b03df92_2 fill in the blank 59564e01b03df92_3 1 2 fill in the blank 59564e01b03df92_5 fill in the blank 59564e01b03df92_6 2arrow_forwardShow Attempt History Current Attempt in Progress M On July 1, 2022, Sheridan Company pays $18,500 to Wildhorse Co. for a 2-year insurance contract. Both companies have fiscal years ending December 31. (51)arrow_forwardJournalize the adjusting entry for each of the following accrued expenses at the end of the current year:a. Product warranty cost, $26,800.b. Interest on the 19 remaining notes owed to Gallardo Co.arrow_forward
- Adjusting entries for prepaid insurance Instructions Chart of Accounts Journal Instructions The balance in the prepaid insurance account, before adjustment at the end of the year, is $18,135. Journalize the March 31 adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of insurance expired during the year is $15,480; (b) the amount of unexpired insurance applicable to future periods is $2,655. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Chart of Accounts CHART OF ACCOUNTS General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 15 Land 16 Equipment 17…arrow_forwardIf necessary, record year-end adjusting entries for uncollectible accounts.Prepare the aging schedule for the following accounts receivable: Ageing classification (numbers of due days) Balance sheet as at 31 December Estimate of the percentage of the account that is uncollectible 0-30 days $120,000 1% 31-60 days 80,100 2 % 61-90 days 21,000 11% 91- 120 days 9,000 23% Más de 120 days 15,300 65% Total accounts receivable $245,400arrow_forwardAt December 31, the unadjusted trial balance of H&R Tacks reports Prepaid Insurance of $6,720 and Insurance Expense of $0. The insurance was purchased on July 1 and provides coverage for 24 months. Required: Prepare the adjusting journal entry on December 31. Post the beginning balances and adjusting entries to the following T-accounts.arrow_forward
- Reviewing insurance policies revealed that a single policy was purchased on March 1, for one year's coverage, in the amount of $9,000. There was no previous balance in the Prepaid Insurance account at that time. Based on the information provided, Make the December 31 adjusting journal entry to bring the balances to correct. Show the impact that these transactions had.arrow_forwardPrepare adjusting journal entry. Liability insurance was purchased on 5/1/21. The 18 month policy cost $4,600 and was paid in full.arrow_forwardOn December 1, a six-month liability insurance policy was purchased for $876. Question Content Area Analyze the required adjustment as of December 31 using T accounts, and then formally enter this adjustment in the general journal. (Trial balance is abbreviated as TB.) Balance Sheet TB; Adj: Balance: Income statement (Insurance Expense) Adj: Page: DATE ACCOUNT TITLE DOC.NO. POST.REF. DEBIT CREDIT 1 20-- Dec. 31 Insurance Expense 1 2 Prepaid Insurance 2arrow_forward
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