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
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Textbook Question
Chapter 4, Problem 4.5E
Determining Adjustments and
Mobo, a wireless phone carrier, completed its first year of operations on October 31. All of the year’s entries have been recorded, except for the following:
- a. At year-end, employees earned wages of $6,000, which will be paid on the next payroll date, November 6.
- b. At year-end, the company had earned interest revenue of $3,000. It will be collected December 1.
Required:
- 1. What is the annual reporting period for this company?
- 2. Identify whether each required adjustment is a deferral or an accrual.
- 3. Show the accounting equation effects of each required adjustment, using the format shown in the demonstration case.
- 4. Why are these adjustments needed?
E4-5 Recording Adjusting Journal Entries
Refer to E4-4.
Required:
Record the required
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Instructions
Mar.
Purchased merchandise on account from Kirkwood Co., $372,000, terms n/30.
1
31
Issued a 30-day, 4% note for $372,000 to Kirkwood Co., on account.
Apr.
30
Paid Kirkwood Co. the amount owed on the note of March 31.
Jun.
Borrowed $150,000 from Triple Creek Bank, issuing a 45-day, 8% note.
1
Jul.
1.
Purchased tools by issuing a $276,000, 60-day note to Poulin Co., which discounted the note at the
rate of 6%.
16
Paid Triple Creek Bank the interest due on the note of June 1 and renewed the loan by issuing a new
30-day, 6.5% note for $150,000. (Journalize both the debit and credit to the notes payable account.)
Aug.
15
Paid Triple Creek Bank the amount due on the note of July 16.
30
Paid Poulin Co. the amount due on the note of July 1.
Dec.
Purchased equipment from Greenwood Co. for $540,000, paying $108,000 cash and issuing a series of
ten 4% notes for $43,200 each, coming due at 30-day intervals.
22
Settled a product liability lawsuit with a customer for $309,500, payable…
Journalize 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.
The following items were selected from among the transactions completed by Sherwood Co. during the current year:Required:1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar.2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):a. Product warranty cost, $29,000.b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.
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...
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