Explanation Adjusting entries: An adjusting entry is prepared when the trial balance is not up-to-date, and complete, and they are usually prepared at the end of the accounting period. This adjusting entry is essential for preparing the financial statements of the business. The adjusting entries of Company L for December 31, 2017 are as follows: (1) Date Accounts title and Description Debit ($) Credit ($) December 31 Insurance Expense (1) 8,000 Prepaid Insurance 8,000 (To record the insurance expenses for December) Working notes: Insurance expenses for building } = [ Amount of insurance paid for the year × Insurance expenses for current year Total term of the policy ] =$ 9,600 × 1 Year 3 Years =$ 3,200 Insurance expenses for vehicle } = [ Amount of insurance paid for the year × Insurance expenses for current year Total term of the policy ] =$ 7,200 × 12 months/18 Months =$ 4,800 Insurance expenses = ( Insurance expenses of building + insurance expenses of vehicle ) = $ 3 , 200 + $ 4 , 800 = $ 8 , 000 (1) Description: Insurance expense is an expense account. There is an increase in the expenses, and hence it is debited. (Increase in insurance expense decreases stockholders’ equity account). Prepaid insurance is an asset account. There is a decrease in asset, and hence, it is credited. (2) Date Account Titles and Description Debit ($) Credit ($) December 31 Unearned Rent Revenue (2) 84,000 Rent revenue 84,000 (To record the unearned rent revenue) Working notes: Unearned rent revenue for November } =Number of leases × ( Rent per month × Rent expenses made for the months ) = 5 × ( $ 5,000 × 2 Months ) =5×$ 10,000 =$ 50,000 Unearned rent revenue for December } =Number of leases × ( Rent per month × Rent expenses made for the months ) = 4 × ( $ 8,500 × 1 Months ) =4×$ 8 ,500 =$ 34,000 Total unearned rent revenue } = ( unearned rent revenue for november + unearned rent revenue for december ) =$ 50,000 + $ 34000 =$ 84,000 (2) Description: Unearned service revenue is a liability account

7th Edition

ISBN: 9781119769736

Author: Kimmel

Publisher: WILEY

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Chapter 4, Problem 5AP

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Prepare the adjusting entries of Company L for December 31.

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Ronny Electronics budgeted sales at 24,000 units at $85 per unit. The actual sales were 23,500 units at $88 per unit. What was Ronny Electronics' sales price variance? correct answer

What was ronny electronics sales price variance?

Chapter 4 Solutions

ACCOUNTING(LL)

Ch. 4 - Prob. 1Q Ch. 4 - Prob. 2Q Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - Prob. 5Q Ch. 4 - Prob. 6Q Ch. 4 - Prob. 7Q Ch. 4 - Prob. 8Q Ch. 4 - Prob. 9Q Ch. 4 - Prob. 10Q

Ch. 4 - Prob. 11Q Ch. 4 - Prob. 12Q Ch. 4 - Prob. 13Q Ch. 4 - Prob. 14Q Ch. 4 - Prob. 15Q Ch. 4 - Prob. 16Q Ch. 4 - Prob. 17Q Ch. 4 - Prob. 18Q Ch. 4 - Prob. 19Q Ch. 4 - Prob. 20Q Ch. 4 - Prob. 21Q Ch. 4 - Prob. 22Q Ch. 4 - Prob. 23Q Ch. 4 - Prob. 24Q Ch. 4 - Prob. 25Q Ch. 4 - Prob. 26Q Ch. 4 - Prob. 27Q Ch. 4 - Prob. 28Q Ch. 4 - Prob. 29Q Ch. 4 - Prob. 30Q Ch. 4 - Prob. 31Q Ch. 4 - Prob. 32Q Ch. 4 - Prob. 33Q Ch. 4 - Prob. 34Q Ch. 4 - Prob. 35Q Ch. 4 - Prob. 36Q Ch. 4 - Prob. 1BE Ch. 4 - Prob. 2BE Ch. 4 - Prob. 3BE Ch. 4 - Prob. 4BE Ch. 4 - Prob. 5BE Ch. 4 - Prob. 6BE Ch. 4 - Prob. 7BE Ch. 4 - Prob. 8BE Ch. 4 - Prob. 9BE Ch. 4 - Prob. 10BE Ch. 4 - Prob. 11BE Ch. 4 - Prob. 12BE Ch. 4 - Prob. 13BE Ch. 4 - Prob. 14BE Ch. 4 - Prob. 15BE Ch. 4 - Prob. 1DIE Ch. 4 - Prob. 2DIE Ch. 4 - Prob. 3DIE Ch. 4 - Prob. 4ADIE Ch. 4 - Prob. 4BDIE Ch. 4 - Prob. 1E Ch. 4 - Prob. 2E Ch. 4 - Prob. 3E Ch. 4 - Prob. 4E Ch. 4 - Prob. 5E Ch. 4 - Prob. 6E Ch. 4 - Prob. 7E Ch. 4 - Prob. 8E Ch. 4 - Prob. 9E Ch. 4 - Prob. 10E Ch. 4 - Prob. 11E Ch. 4 - Prob. 12E Ch. 4 - Prob. 13E Ch. 4 - Prob. 14E Ch. 4 - Prob. 15E Ch. 4 - Prob. 17E Ch. 4 - Prob. 18E Ch. 4 - Prob. 20E Ch. 4 - Prob. 21E Ch. 4 - Prob. 22E Ch. 4 - Prob. 23E Ch. 4 - Prob. 2AP Ch. 4 - Prob. 3AP Ch. 4 - Prob. 4AP Ch. 4 - Prob. 5AP Ch. 4 - Prob. 6AP Ch. 4 - Prob. 7AP Ch. 4 - Prob. 1CACR Ch. 4 - Prob. 2CACR Ch. 4 - Prob. 3CACR Ch. 4 - Prob. 4CACR Ch. 4 - Prob. 1EYCT Ch. 4 - Prob. 2EYCT Ch. 4 - Prob. 3EYCT Ch. 4 - Prob. 4EYCT Ch. 4 - Prob. 6EYCT Ch. 4 - Prob. 7EYCT Ch. 4 - Prob. 8EYCT Ch. 4 - Prob. 9EYCT Ch. 4 - Prob. 1IFRS

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