6th Edition

ISBN: 9781260664386

Author: PHILLIPS, LIBB

Publisher: MCG

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…

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Textbook Question

Chapter 4, Problem 5ME

Determine Accounting Equation Effects of Deferral Adjustments

For each of the following transactions for the Sky Blue Corporation, give the accounting equation effects of the adjustments required at the end of the month on October 31:

a. Collected $2,400 rent for the period October I to December 31, which was credited to Unearned Revenue on October 1.
b. Paid $1,200 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount.
c. Used a machine purchased on October 1 for $48,000. The company estimates annual depreciation of $4,800.

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Chapter 4, Problem 4ME

Chapter 4, Problem 6ME

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Chapter 4 Solutions

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...

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Solution Summary: The author explains the effects of accounting equation on the adjustments at the end of the month on October 31.

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