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College Accounting 2nd Edition by David Haddock, John Price,Michael Farina
Edition 2ISBN: 978-0073396958College Accounting 2nd Edition by David Haddock, John Price,Michael Farina
Edition 2ISBN: 978-0073396958 Exercise 14
Recording adjustments for accrued and prepaid items and unearned income.
Based on the information below, record the adjusting journal entries that must be made for John Gavone Consulting on June 30, 2013. The company has a June 30 fiscal year-end. Use 18 as the page number for the general journal.
a.-b. Merchandise Inventory, before adjustment, has a balance of $7,500. The newly counted inventory balance is $8,000.
c. Unearned Seminar Fees has a balance of $6,000, representing prepayment by customers for five seminars to be conducted in June, July, and August 2013. Two seminars had been conducted by June 30, 2013.
d. Prepaid Insurance has a balance of $12,000 for six months insurance paid in advance on May 1, 2013.
e. Store Equipment costing $5,000 was purchased on March 31, 2013. It has a salvage value of $500, and a useful life of five years.
f. Employees have earned $250 that has not been paid at June 30, 2013.
g. The employer owes the following taxes on wages not paid at June 30, 2013: SUTA, $7.50; FUTA, $2,00; Medicare, $3.63; and Social Security, $15.50.
h. Management estimates uncollectible accounts expense at 1% of sales. This year's sales were $2,000,000.
i. Prepaid Rent has a balance of $6,600 for six months rent paid in advance on March 1, 2013.
j. The supplies account in the general ledger has a balance of $400. A count of supplies on hand at June 30, 2013 indicated $150 of supplies remain.
k. The company borrowed $6,000 from First Bank on June 1, 2013 and issued a four-month note. The note bears interest at 7%.
Analyze: After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?
Based on the information below, record the adjusting journal entries that must be made for John Gavone Consulting on June 30, 2013. The company has a June 30 fiscal year-end. Use 18 as the page number for the general journal.
a.-b. Merchandise Inventory, before adjustment, has a balance of $7,500. The newly counted inventory balance is $8,000.
c. Unearned Seminar Fees has a balance of $6,000, representing prepayment by customers for five seminars to be conducted in June, July, and August 2013. Two seminars had been conducted by June 30, 2013.
d. Prepaid Insurance has a balance of $12,000 for six months insurance paid in advance on May 1, 2013.
e. Store Equipment costing $5,000 was purchased on March 31, 2013. It has a salvage value of $500, and a useful life of five years.
f. Employees have earned $250 that has not been paid at June 30, 2013.
g. The employer owes the following taxes on wages not paid at June 30, 2013: SUTA, $7.50; FUTA, $2,00; Medicare, $3.63; and Social Security, $15.50.
h. Management estimates uncollectible accounts expense at 1% of sales. This year's sales were $2,000,000.
i. Prepaid Rent has a balance of $6,600 for six months rent paid in advance on March 1, 2013.
j. The supplies account in the general ledger has a balance of $400. A count of supplies on hand at June 30, 2013 indicated $150 of supplies remain.
k. The company borrowed $6,000 from First Bank on June 1, 2013 and issued a four-month note. The note bears interest at 7%.
Analyze: After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?
Explanation
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(a)
At the end of the accounting year t...
College Accounting 2nd Edition by David Haddock, John Price,Michael Farina
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