Exam 3: Adjusting Accounts for Financial Statements

The publisher of Business Success Monthly, a monthly business magazine, received $64,800 for three-year subscriptions on January 1, 2016. A. What entry would be made to record the cash receipt on January 1, 2016? B. What entry should be made before the financial statements are prepared for the month ending January 31, 2016?

A company bills customers for services rendered on account. Which of the following is one part of recording this transaction?

Use the following adjusted trial balance for Andersen Corporation to answer Exercises below -Use Andersen's adjusted trial balance above to prepare Andersen's balance sheet for the current year-end.

Use the following adjusted trial balance for Andersen Corporation to answer Exercises below -Use Andersen's adjusted trial balance to prepare entries to close Andersen's temporary accounts in journal entry form.

Which of the following is a distinguishing characteristic of a deferral?

Adjusting unearned revenues causes a liability to decline.

All accounts in the general ledger are closed at a company's fiscal year end in order to facilitate preparation of the financial statements and to ready the accounts for the activities of the next year.

Use the following information to answer questions below Horton's Donuts has 12 employees who are paid $18 per hour. The company purchases its inventory, on account, daily. At December 31, 2016, each of Horton's Donuts' employees had worked 20 hours which had not been paid or recorded. Also on this date, the company had taken receipt of $74,880 of inventory from its suppliers which had not been recorded in the accounts. As of the beginning of 2016, the company had equipment totaling $1,440,000 which was depreciated at $144,000 per year. Prior to adjustments, the company's trial balance showed $205,680 in the wages expense account and $100,320 of inventory. -If Horton's Donuts makes the appropriate adjusting entry, which of the following is one part of the journal entry that will be made when the payment of wages is made in January?

Use the following information to answer questions below On April 1, 2016, SBD Corp. paid $120,000 for rent on warehouse space one year in advance. On October 1, 2016, SBD Corp. entered into a lease agreement to rent out its old warehouse space it was no longer using. This agreement calls for SBD to receive $8,000 per month from the lessee, due and payable at the end of the 4-month lease term. At December 31, 2016, none of the rental payments from the lessee had yet been received. -If SBD makes the appropriate adjusting entry, how much will be reported on the December 31, 2016 income statement for rent expense?

Use the T-account below, to answer the following questions. A. What journal entry is most likely represented by $ 3,600,400 in the T-account? What business event caused this? B. What journal entry is most likely represented by the $2,812,000 in the T-account? What business event caused this? C. What is the balance of Accounts Receivable on December 31?

Which of the following journal entries will record the payment of a $1,350 accounts payable originally incurred for Office Supplies?

Jamie's Cleaning provides janitorial services for commercial customers. On December 31, 2015, the credit balance of the Common Stock and Retained Earnings accounts were $48,000 and $22,000, respectively. During 2016, the company issued $16,800 of stock, and paid $15,200 in dividends. The income statement resulted in a profit of $84,800. Prepare a 2016 statement of stockholders' equity for Jamie's Cleaning.

Use the following information to answer questions below Horton's Donuts has 12 employees who are paid $18 per hour. The company purchases its inventory, on account, daily. At December 31, 2016, each of Horton's Donuts' employees had worked 20 hours which had not been paid or recorded. Also on this date, the company had taken receipt of $74,880 of inventory from its suppliers which had not been recorded in the accounts. As of the beginning of 2016, the company had equipment totaling $1,440,000 which was depreciated at $144,000 per year. Prior to adjustments, the company's trial balance showed $205,680 in the wages expense account and $100,320 of inventory. -If Horton's Donuts makes the appropriate adjusting entry, how much will be reported on the December 31, 2016 income statement as wage expense?

Kramer's Kitchen sells pre-packaged meals to consumers. During 2016, the company purchased inventory on account at a cost of $16,920,000. The following T-accounts reflect information contained in the company's 2015 and 2016 balance sheets. A. What amount did Kramer's Kitchen pay in cash to its suppliers during 2016? B. What amount will Kramer's Kitchen report as Accounts Payable on its balance sheet at December 31, 2016?

Cellular and More operates a kiosk in a local mall selling cell phones and other equipment. During 2015, the company purchased $124,000 of inventory, all on account. The following T-accounts reflect information contained in the company's 2016 and 2015 balance sheets. A. Prepare the journal entry, using the financial statement effects template and in journal entry form, to record Cellular and More's purchases during 2016. B. How much will Cellular and More report at December 31, 2016 on its balance sheet for Inventory? For Accounts Payable? C. If Cellular and More pays $26,000 of the amounts due for inventory on January 4, 2017, how much will the liability be on that date immediately after payment? D. How much will Cellular and More report for the year ending December 31, 2016 on its income statement as Cost of Goods Sold?

Do the steps in the accounting cycle occur with equal frequency? Why or why not?

Which statement is true of the statement of stockholders' equity?

The income statement, statement of stockholders' equity, and statement of cash flows report on time periods that depict flows.

Badger Bagels had the following separate situations occur during 2016. The company's accountant is preparing the annual financial statements at December 31, 2016 and has asked you to prepare the adjusting entries for each situation using the journal entry form. a. On June 1, 2016, Badger Bagels paid the annual lease amount on its warehouse space. The annual lease is $26,400 and was recorded by debiting Prepaid Rent and crediting Cash. No adjusting entries have been prepared since June 1, 2016. b. The Unearned Revenue account has an unadjusted balance of $8,000 consisting of gift cards sold to customers. Redeemed gift cards that have not yet been recorded total $4,800. c. The company has not yet received a bill or paid for utilities for the month of December. The expense is estimated to be $3,360 d. On December 1, 2016, Badger Bagels received $6,000 cash from a customer related to a special order. The special order was delivered to the customer on December 29 but no entry has been made to record the delivery. e. At December 31, 2016, employee wages of $9,200 have been incurred but not paid or recorded. f. At December 31, 2016, $1,760 of interest has been incurred, but not yet paid or recorded. g. Unrecorded depreciation on equipment is $11,200.

Third Avenue Grill, an upscale restaurant on the beach, has just completed its first full year of operations on December 31, 2016. It provides meals both in its restaurant and catering. Selected balances from its general ledger before year-end adjustments follow. (All balances are normal.) An analysis of the firm's records reveals the following. 1. The balance in Prepaid Advertising represents the amount paid for newspaper advertising for one year. The agreement, which calls for the same amount of space each month, covers the period from February 1, 2016, to January 31, 2017. Third Avenue Grill did not advertise during its first month of operations. 2. Equipment purchased January 1, 2016, has an estimated life of eight years. 3. Utilities expense does not include the expense for December, estimated at $ 1,000. The bill will not arrive until January, 2016. 4. At year-end, employees have earned $12,800 in wages that will not be paid until January. 5. Supplies available at year-end amounted to $2,600. 6. At year-end, unpaid interest of $ 480 has accrued on the notes payable. 7. The firm's lease calls for rent of $2,000 per month payable on the first of each month, plus an amount equal to 2% of annual sales. The rental percentage is payable within 15 days after the end of the year. Prepare adjusting entries in journal entry form.