Concept explainers
1.
Introduction:
To identify and prepare:Adjustment entry.
2.
Introduction: Journal entry is recorded for each transaction that has been incurred during the accounting period wherein one or more accounts are debited or credited and the total of both debit and credit equals.
To compute:The amount of prepaid rent paid on April 1 2016.
3.
Introduction: Journal entry is recorded for each transaction that has been incurred during the accounting period wherein one or more accounts are debited or credited and the total of both debit and credit equals.
To identify and prepare:Adjustment entry to record
4.
Introduction: Journal entry is recorded for each transaction that has been incurred during the accounting period wherein one or more accounts are debited or credited and the total of both debit and credit equals.
To compute:Useful life of equipment.
5.
Introduction: Journal entry is recorded for each transaction that has been incurred during the accounting period wherein one or more accounts are debited or credited and the total of both debit and credit equals.
To identify and prepare:Adjustment entry for interest expense.
6.
Introduction: Journal entry is recorded for each transaction that has been incurred during the accounting period wherein one or more accounts are debited or credited and the total of both debit and credit equals.
To compute:Monthly interest rate on the loan.
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Financial Accounting: The Impact on Decision Makers
- Adjusting Entries Kretz Corporation prepares monthly financial statements and therefore adjusts its accounts at the end of every month. The following information is available for March 2016: Kretz Corporation takes out a 90-day, 8%, $15,000 note on March 1, 2016, with interest and principal to be paid at maturity. The asset account Office Supplies on Hand has a balance of $1,280 on March 1, 2016. During March, Kretz adds $750 to the account for purchases during the period. A count of the supplies on hand at the end of March indicates a balance of $1,370. The company purchased office equipment last year for $62,600. The equipment has an estimated useful life of six years and an estimated salvage value of $5,000. The companys plant operates seven days per week with a daily payroll of $950. Wage earners are paid every Sunday. The last day of the month is Thursday, March 31. The company rented an idle warehouse to a neighboring business on February 1, 2016, at a rate of $2,500 per month. On this date, Kretz Corporation credited Rent Collected in Advance for six months rent received in advance. On March 1, 2016, Kretz Corporation credited a liability account, Customer Deposits, for $4,800. This sum represents an amount that a customer paid in advance and that Kretz will earn evenly over a four-month period. Based on its income for the month, Kretz Corporation estimates that federal income taxes for March amount to $3,900. Required For each of the preceding situations, prepare in general journal form the appropriate adjusting entry to be recorded on March 31, 2016.arrow_forwardAssume the following data for Lusk Inc. before its year-end adjustments: Journalize the adjusting entries for the following: a. Estimated customer allowances b. Estimated customer returnsarrow_forwardAssume the following data for Oshkosh Company before its year-end adjustments: Journalize the adjusting entries for the following: a. Estimated customer refunds and allowances b. Estimated customer returnsarrow_forward
- B. ADJUSTING ENTRIES: More Review Show (MRS) prepares quarterly statements. The bookkeeper presented to you the records and you found out the following account balances before adjustments for the quarter ended March 31, 200B: 1. The notes receivable balance of P180,000 as of March 31, 200B consisted of a 60-day 12% note for P120,000 dated February 14, 200B and a 30-day 6% note for P60,000 dated March 16, 200B 2. The balance of the prepaid insurance account of P22,000 represents a one-year policy contracted last November 1, 200A for P10,000 and two year policy contracted last July 1, 200Å for P12,000 3. The balance of the prepaid rent account of P50,000 pertains to advance rent paid last December 1, 200A six months effective on the same date. 4. The rate per day of each of the four shop workers is P350. MRS pays the weekly salaries of its workers every Monday of the following week ( a week consist of five days from Monday to Friday). March 31, 200B falls on Thursday. 5. Mortgage notes…arrow_forwardA company purchased a certificate of deposit (a short-term investment that pays interest to the purchaser when it matures) on March 1 that will pay $120 of interest 3 months from that date when it matures. On March 31, which of the following adjusting journal entries would be made? Account Debit Credit A. Interest receivable 120 Interest revenue 120 B. Interest receivable 40 Interest revenue 40 C. Interest receivable 120 Unearned revenue 120 D. No entry is recorded on March 31. Group of answer choices A. B. C. D.arrow_forwardPrepare the necessary journal entries (include journal entry descriptions) for the selected transactions of Nester Company whose fiscal year end is December 31, You MUST show the details of any calculations either in parenthesis or as a footnote. Date Transaction Description 7/1/20Y5 Accepted a 5-month, 6% note in settlement of a past due customer account, Barns Company, with a $9,000 balance. 11/1/20Y5 Accepted a promissory note from a Nester Company executive in exchange for providing the executive with S20,000 to be used for relocation costs. The note carries interest of 9% and is due in 8 months. 12/1/20Y5 Received the amount due on the note from Barns Company. 12/31/20Y5 Accrued interest on the 8-month note received from the Nester Company executive. 7/1/20Y6 Received full payment from the Nester Company executive.arrow_forward
- Entries for notes receivable, including year-end entries The following selected transactions were completed by Interlocking Devices Co., a supplier of zippers for clothing: 2017 December 7. Received from Unitarian Clothing & Bags Co., on account, a $75,000, 60-day, 3 % note dated December 7. December 31. Recorded an adjusting entry for accrued interest on the note of December 7. December 31. Recorded the closing entry for interest revenue. 2018 February 5. Received payment of note and interest from Unitarian Clothing & Bags Co. Journalize the entries to record the transactions. If an amount box does not require an entry, leave it blank. Assume 360 days in a year. 2017, Dec. 7 Dec. 31 Dec. 31 2018, Feb. 5arrow_forwardSheridan Company lends Carla Vista company 94000 on April 1, accepting a four-month, 6% interest note. Sheridan Company prepares financial statement on April 30. What adjusting entry should be made before the Financial statement can be prepared ?arrow_forwardComprehensive On November 30, 2019. Davis Company had the following account balance. During the month of December, Davis entered into the following transactions: Required: a.Prepare generaljournal entries to record the preceding transactions. b.Post to general ledger T accoun c.Prepare a year-end trial balance on a worksheet and complete theworksheet using the following information: (a) accrued salaries at year-end total s1,200; (b) for simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 yean with no residual value;(c) supplies on hand at the end of the year total $630; (d) bad debts expense for the year totals $830; and (e)the income tax rate is 30%; income taxes are payable in the first quarter of d.Prepare the companis financial statements for 2019. e.Prepare the 2019 (a) adjusting and (b) closing entries in the general journal.arrow_forward
- More Review Show (MRS) prepares quarterly statements. The bookkeeper presented to you the records and you found out the following account balances before adjustments for the quarter ended March 31, 200B: The balance of the prepaid insurance account of P22,000 represents a one-year policy contracted last November 1, 200A for P10,000 and two year policy contracted last July 1, 200A for P12,000 Required: Prepare adjusting entryarrow_forwardOn December 1, Daw Company accepts a $18,000, 45-day, 10% note from a customer. (1) Prepare the year-end adjusting entry to record accrued interest revenue on December 31. (2) Prepare the entry required on the note's maturity date assuming it is honored. (Use 360 days a year.) View transaction list Journal entry worksheet 1 2 Record the year-end adjustment related to this note, if any. Note: Enter debits before credits. Date December 31 General Journal Debit Credit >arrow_forwardREQUIRED Record the adjustment journal entry in respect of rent income in the books of NT Stores as at 28 February 2022. INFORMATION The Rent Income account of NT Stores reflected a total of R276 000 on 28 February 2022, the end of the accounting period. This was in respect of rent for an office occupied by a tenant for the entire financial year. The monthly rental was increased by 10% with effect from 01 September 2021. The rent for February 2022 was due to be received on 01 March 2022.arrow_forward
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