Connect 1 Semester Access Card for Fundamentals of Financial Accounting
5th Edition
ISBN: 9781259128547
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 4, Problem 4.11ME
Preparing
Service Pro Corp (SPC) is preparing adjustments for its September 30 year-end. For the following transactions and events, show the September 30
- a. Prepaid Insurance shows a balance of zero at September 30, but Insurance Expense shows a debit balance of $2,340, representing the cost of a three-year fire insurance policy that was purchased on September 1 of the current year.
- b. On August 31 of this year, Cash was debited and Service Revenue was credited for $1,500. The 51,500 related to fees for a three-month period beginning September 1 of the current year.
- c. The company’s income tax rate is 20%, After making the above adjustments, SPC’s net income before tax is $10,000. No income tax has been paid or recorded.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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…
Adjusting Entries for Prepaid Insurance
The balance in the prepaid insurance account, before adjustment at the end of the year, is $8,950.
Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:
If an amount box does not require an entry, leave it blank.
a. The amount of insurance expired during the year is $6,800.
b. The amount of unexpired insurance applicable to future periods is $2,150.
Please help with a and b
Chapter 4 Solutions
Connect 1 Semester Access Card for 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 - Understanding Concepts Related to Adjustments...Ch. 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. 4.6MECh. 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 an Income Statement The Sky Blue...Ch. 4 - Reporting a Balance Sheet Refer to M4-14. Prepare...Ch. 4 - Reporting an Income Statement The Sky Blue...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Preparing and Posting Adjusting Journal Entries At...Ch. 4 - Prob. 4.20MECh. 4 - Prob. 4.21MECh. 4 - Prob. 4.22MECh. 4 - Prob. 4.23MECh. 4 - Prob. 4.24MECh. 4 - Prob. 4.25MECh. 4 - Prob. 4.26MECh. 4 - Posting AJEs and Preparing an Adjusted Trial...Ch. 4 - Identifying Adjustments and Preparing Financial...Ch. 4 - Prob. 4.3ECh. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Determining Adjustments and Accounting Equation...Ch. 4 - Prob. 4.6ECh. 4 - Prob. 4.7ECh. 4 - Prob. 4.8ECh. 4 - Prob. 4.9ECh. 4 - Inferring Transactions from Accrual and Deferral...Ch. 4 - Reporting Depreciation The adjusted trial balance...Ch. 4 - Recording Transactions Including Adjusting and...Ch. 4 - Prob. 4.13ECh. 4 - Prob. 4.14ECh. 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. 4.18ECh. 4 - Prob. 4.19ECh. 4 - Prob. 4.1CPCh. 4 - Prob. 4.2CPCh. 4 - Prob. 4.3CPCh. 4 - identifying and Preparing Adjusting Journal...Ch. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Prob. 4.2PACh. 4 - Determining Accounting Equation Effects of...Ch. 4 - Prob. 4.4PACh. 4 - Preparing a Trial Balance, Closing Journal Entry,...Ch. 4 - Recording Adjusting Journal Entries Cactus...Ch. 4 - Determining Accounting Equation Effects of...Ch. 4 - Prob. 4.4PBCh. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 4.2COPCh. 4 - Prob. 4.3COPCh. 4 - Prob. 4.4COPCh. 4 - From Recording Transactions to Preparing Accrual...Ch. 4 - Prob. 4.6COPCh. 4 - Finding Financial Information Refer to the...Ch. 4 - Prob. 4.2SDCCh. 4 - Ethical Decision Making: A Mini-Case Assume you...Ch. 4 - Adjusting the Accounting Records Assume it is now...
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.Similar questions
- Adjusting entries for prepaid insurance The balance in the prepaid insurance account, before adjustment at the end of the year, is $22,500. Journalize the 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 $18,000. If an amount box does not require an entry, leave it blank. 88 b. The amount of unexpired insurance applicable to future periods is $4,500. If an amount box does not require an entry, leave it blank.arrow_forwardAdjusting Entries and Financial StatementsThe unadjusted trial balance for Mitchell Pharmacy appears below. The following information is available at year end for adjustments:a. An analysis of insurance policies indicates that $2,1800 of the prepaid insurance is coverage for 2020.b. Depreciation expense for 2019 is $10,130.c. Four months' interest at 10% is owed but unrecorded and unpaid on the note payable.d. Wages of $4,950 are owed but unpaid and unrecorded at December 31.e. Income taxes of $11,370 are owed but unrecorded and unpaid at December 31.Required:1. Prepare the adjusting entries.2. Prepare an income statement, a retained earnings statement, and a balance sheet using adjusted account balances.3. CONCEPTUAL CONNECTION Why would you not want to prepare financial statements until after the adjusting entries are made?arrow_forwardThe balance in the prepaid insurance account, before adjustment at the end of the year, is $18,565. 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 $14,135; (b) the amount of unexpired insurance applicable to future periods is $4,430. 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.arrow_forward
- The balance in the prepaid insurance account, before adjustment at the end of the year, is $14,460. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: If an amount box does not require an entry, leave it blank. a. The amount of insurance expired during the year is $10,990. Accounts Payable x Prepaid Expense X 10,860 x 10,860 X Feedback T Check My Work Set up a Prepaid Insurance T-account. Consider each situation by recalling that prepaid insurance expires and becomes an expense with the passage of time. The insurance expense is the amount needed to arrive at the given ending balance. Complete your adjusting entry by making sure that the entry affects at least one income statement account and one balance sheet account. b. The amount of unexpired insurance applicable to future periods is $3,470.arrow_forwardThe balance in the Prepaid Insurance account before adjustment at the end of the year is P7,200, which represents twelve months’ Insurance purchased on December 1. The adjusting entry required on Dec. 31, 2018 is a. debit Prepaid Insurance, P7,200; credit Insurance Expense, P7,200 b. debit Insurance Expense, P600; credit Insurance Payable, P600 c. debit Insurance Expense, P6,600; credit Prepaid Insurance, P6,600 d. debit Prepaid Insurance, P600; credit Insurance Expense, P600 e. debit, Insurance Expense, P600; credit Prepaid Insurance, P600arrow_forwardThe prepaid insurance account had a balance of $5,300 at the beginning of the year. The account was debited for $5,900 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: If an amount box does not require an entry, leave it blank. Question Content Area a. The amount of unexpired insurance applicable to future periods is $1,000. blank Insurance Expense Insurance Expense Prepaid Insurance Prepaid Insurancearrow_forward
- The prepaid insurance account had a balance of $5,300 at the beginning of the year. The account was debited for $5,900 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: If an amount box does not require an entry, leave it blank. Question Content Area a. The amount of unexpired insurance applicable to future periods is $1,000. blank Insurance Expense Insurance Expense Prepaid Insurance-- answer Prepaid Insurance-- answer another question Selected account balances before adjustment for Intuit Realty at November 30, the end of the current year, follow: Debits Credits Accounts Receivable $73,830 Equipment 114,000 Accumulated Depreciation - Equipment $11,370 Prepaid Rent 9,300 Supplies 2,210 Wages Payable _ Unearned Fees 10,190 Fees Earned 431,170 Wages Expense…arrow_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_forwardThe prepaid insurance account had a balance of $7,155 at the beginning of the year. The account was debited for $22,025 for premiums on policies purchased during the year, ending on March 31. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: (a) the amount of unexpired insurance applicable to future periods is $8,765; (b) the amount of insurance expired during the year is $20,415. Refer to the Chart of Accounts for exact wording of account titles.arrow_forward
- 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. 31arrow_forwardBase Company purchased a one-year insurance policy on March 1 for $8,100. The policy coverage started on the date of purchase. Which of the following adjusting entries should be recorded on December 31 assuming the company only makes adjustments to prepaid insurance at the end of the year? a.No entry is required. b.Debit Insurance Expense for $8,100 and credit Prepaid Insurance for $8,100 c.Debit Insurance Expense for $6,750 and credit Prepaid Insurance for $6,750 d.Debit Insurance Expense for $6,075 and credit Prepaid Insurance for $6,075arrow_forwardThe balance in the Prepaid Insurance account before adjustment at the end of the year is P7,200 which represents twelve months insurance purchased on December 1. What is the adjusting entry required on Dec. 31, 2021? debit Prepaid Insurance, P600; credit Insurance Expense, P600. debit Insurance Expense, P600; credit Prepaid Insurance, P600. debit Insurance Expense, P600; credit Insurance Payable, P600. debit Insurance Expense, P6,600; credit Prepaid Insurance, P6,600. debit Prepaid Insurance, P7,200; credit Insurance Expense, P7,200.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License