Exam 3: Adjusting the Accounts

Prepare the required end-of-period adjusting entries for each independent case listed below. Case 1 Moonbeam Company began the year with a $3,000 balance in the Supplies account. During the year, $8,500 worth of additional office supplies were purchased. A physical count of office supplies on hand at the end of the year revealed that $4,400 worth of office supplies had been used during the year. No adjusting entry has been made until year end. Case 2 Western Company has a calendar year-end accounting period. On July 1, the company purchased office equipment for $30,000. It is estimated that the office equipment will depreciate $500 each month. No adjusting entry has been made until year end. Case 3 Ranch Realty is in the business of renting several apartment buildings and prepares monthly financial statements. It has been determined that 3 tenants in $800 per month apartments and one tenant in the $1,000 per month apartment had not paid their August rent as of August 31st.

Cindi's Candies paid employee wages on and through Friday, January 26, and the next payroll will be paid in February. There are three more working days in January (29-31). Employees work 5 days a week and the company pays $900 a day in wages. What will be the adjusting entry to accrue wages expense at the end of January?

BJ, an employee of Walker Corp., will not receive her paycheck until April 2. Based on services performed from March 16 to March 31, her salary was $800. The adjusting entry for Walker Corp. on March 31 is

Comparability and consistency are qualitative characteristics that make accounting information useful for decision-making purposes. Briefly explain the difference between these two characteristics and explain how they are related to each other.

An accounting time period that is one year in length, but does not begin on January 1, is referred to as

An adjusting entry recording accrued salaries for a period indicates that Salaries Expense has been ________________ but has not yet been ________________ or recorded.

For accounting purposes, business transactions should be kept separate from the personal transactions of the stockholders of the business.

As a result of the revenue recognition project by the FASB and IASB:

The economic entity assumption states that economic events

A company using the same accounting principles from year to year is an application of

Bread Basket provides baking supplies to restaurants and grocery stores. On November 1, 2014, Bread Basket signed a €500,000, 6-month note payable. The note requires Bread Basket to pay interest at an annual rate of 6%. Bread Basket's accountant is a recent college graduate who lacks practical experience. Therefore, the appropriate adjusting entry is not made. What is the impact on its December 31, 2014 statement of financial position?

A flower shop makes a large sale and provides flowers to a customer for $1,000 on November 30. The customer is sent a statement on December 5 and a check is received on December 10. The flower shop follows IFRS and applies the revenue recognition principle. When is the $1,000 considered to be earned?

The two fundamental qualities of useful information are

Which of the following adjustments would require decreasing the liabilities reported on the statement of financial position?

The economic entity assumption states that economic events can be identified with a particular unit of accountability.

An adjusted trial balance proves the ______________ of the total debit and credit balances after all ______________ entries have been made.

Daly Investments purchased an 18-month insurance policy on May 31, 2014 for $6,300. The December 31, 2014 statement of financial position would report Prepaid Insurance of

Which of the following time periods would not be referred to as an interim period?

The following ledger accounts are used by the Chicago Heights Dog Track: Instructions For each of the following transactions below, prepare the journal entry (if one is required) to record the initial transaction and then prepare the adjusting entry, if any, required on September 30, the end of the fiscal year. (a) On September 1, paid rent on the track facility for three months, $210,000. (b) On September 1, sold season tickets for admission to the racetrack. The racing season is year-round with 25 racing days each month. Season ticket sales totaled $840,000. (c) On September 1, borrowed $300,000 from First National Bank by issuing a 9% note payable due in three months. (d) On September 5, schedules for 20 racing days in September, 25 racing days in October, and 15 racing days in November were printed for $3,000. (e) The accountant for the concessions company reported that gross receipts for September were $160,000. Ten percent is due to the track and will be remitted by October 10.