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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 8
Determining Adjustments and Accounting Equation Effects
Mobo, a wireless phone carrier, completed its first year of operations on December 31, 2012. All of the 2012 entries have been recorded, except for the following:
a. At year-end, employees earned wages of $6,000, which will be paid on the next payroll date, January 6, 2013.
b. At year-end, the company had earned interest revenue of $3,000. It will be collected March 1, 2013.
Required:
1. What is the annual reporting period for this company
2. Identify whether each required adjustment is a deferral or an accrual.
3. Show the accounting equation effects of each required adjustment, using the format shown in the demonstration case.
4. Why are these adjustments needed
Mobo, a wireless phone carrier, completed its first year of operations on December 31, 2012. All of the 2012 entries have been recorded, except for the following:
a. At year-end, employees earned wages of $6,000, which will be paid on the next payroll date, January 6, 2013.
b. At year-end, the company had earned interest revenue of $3,000. It will be collected March 1, 2013.
Required:
1. What is the annual reporting period for this company
2. Identify whether each required adjustment is a deferral or an accrual.
3. Show the accounting equation effects of each required adjustment, using the format shown in the demonstration case.
4. Why are these adjustments needed
Explanation
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Verified
1.
The annual reporting period for the c...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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