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A5 - Ch 4 Entries Instructions Description Prepare adjusting-(Answered)

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A5 - Ch 4 Entries

Instructions

Description

Prepare adjusting journal entries for the situations given below. A few situations depict errors in the accounts. For those, please indicate the impact of the error as stated in the problem, rather than preparing an entry.

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Question 1

  1. A $10,000 purchase of equipment on December 30 was erroneously debited to Long-Term Debt. The credit was correctly made to Cash. Indicate the account(s) that are affected by the error and for each account whether the account is overstated or understated. (Example: A company purchased $500 merchandise inventory on account and incorrectly debited supplies inventory. Answer: Merchandise inventory is understated by $500 and Supplies inventory is overstated by $500.)

Question 2

  1. Machinery is repaired and maintained by an outside maintenance company on an annual fee basis, payable in advance. The $1,800 fee for the year beginning September 1 was paid on September 1, 2012, and charged to Repairs and Maintenance Expense. What adjustment is necessary on December 31, 2012?

Question 3

  1. Hatfield uses the accrual basis of accounting and has a December 31st fiscal year end. Hatfield accepted an $8,000 note receivable from a client on October 1 for tax services she had performed. The note plus interest of 6% per year is due in 6 months. Hatfield increased Note Receivable and Fee Revenue by $8,000 on October 1. Prepare the December 31 adjusting entry for the interest.


Question 4

  1. Hatfield uses the accrual basis of accounting and has a December 31st fiscal year end. As of December 31, Hatfiled had not recorded $800 of unpaid wages earned by her secredtary during late December. Prepare the December 31 adjusting entry.


Question 5

  1. During November and December, Baker rendered services to a client, a utility company. She had intended to bill the company for $5,400 services through December 31, but failed to do so. Prepare the December 31 adjusting entry for Baker, if any.

Question 6

  1. A French magazine company collects subscriptions in advance of delivery of its magazines. However, many magazines are delivered to magazine distributors for newsstand sales, and these distributors are billed and pay later. During the month of March, the French magazine company sold subscriptions on account for 80,000 euros. Prepare the journal entry.

Question 7

  1. Columbia had loaned cash to several of its independent retail distributors. As of December 31, 012, the distributors owed $112 thousand of interest that had been unrecorded.

Question 8

  1. During November and December, Baker rendered services to a client, a utility company. She had intended to bill the company for $5,400 services through December 31, but failed to do so. Prepare the December 31 adjusting entry for the utility company, if any.

Question 9

  1. Recorded the entry for $500 depreciation on equipment for the current fiscal period.

Question 10

  1. The firm recognized rent expense for November of $1,000. Rent had been paid in advance.

A5 - Ch 4 Entries

 

Instructions

 

Description

 

Prepare adjusting journal entries for the situations given below. A few situations

 

depict errors in the accounts. For those, please indicate the impact of the error as

 

stated in the problem, rather than preparing an entry.

 


 

Question 1

 

1. A $10,000 purchase of equipment on December 30 was erroneously debited to LongTerm Debt. The credit was correctly made to Cash. Indicate the account(s) that are

 

affected by the error and for each account whether the account is overstated or

 

understated. (Example: A company purchased $500 merchandise inventory on account and incorrectly

 

debited supplies inventory. Answer: Merchandise inventory is understated by $500 and Supplies inventory

 

is overstated by $500.)

 


 

Question 2

 

1. Machinery is repaired and maintained by an outside maintenance company on an annual

 

fee basis, payable in advance. The $1,800 fee for the year beginning September 1 was

 

paid on September 1, 2012, and charged to Repairs and Maintenance Expense. What

 

adjustment is necessary on December 31, 2012?

 


 

Question 3

 

1. Hatfield uses the accrual basis of accounting and has a December 31st

 

fiscal year end. Hatfield accepted an $8,000 note receivable from a

 

client on October 1 for tax services she had performed. The note plus

 

interest of 6% per year is due in 6 months. Hatfield increased Note

 

Receivable and Fee Revenue by $8,000 on October 1. Prepare the

 

December 31 adjusting entry for the interest.

 


 

Question 4

 

1. Hatfield uses the accrual basis of accounting and has a December 31st

 

fiscal year end. As of December 31, Hatfiled had not recorded $800 of

 

unpaid wages earned by her secredtary during late December. Prepare

 

the December 31 adjusting entry.

 


 

Question 5

 

1. During November and December, Baker rendered services to a client, a utility company.

 

She had intended to bill the company for $5,400 services through December 31, but

 

failed to do so. Prepare the December 31 adjusting entry for Baker, if any.

 


 

Question 6

 

1. A French magazine company collects subscriptions in advance of delivery of its

 

magazines. However, many magazines are delivered to magazine distributors for

 

newsstand sales, and these distributors are billed and pay later. During the month of

 

March, the French magazine company sold subscriptions on account for 80,000 euros.

 

Prepare the journal entry.

 


 

Question 7

 

1. Columbia had loaned cash to several of its independent retail distributors. As of

 

December 31, 012, the distributors owed $112 thousand of interest that had been

 

unrecorded.

 


 

Question 8

 


 

1. During November and December, Baker rendered services to a client, a utility company.

 

She had intended to bill the company for $5,400 services through December 31, but

 

failed to do so. Prepare the December 31 adjusting entry for the utility company, if any.

 


 

Question 9

 

1. Recorded the entry for $500 depreciation on equipment for the current fiscal period.

 


 

Question 10

 

1. The firm recognized rent expense for November of $1,000. Rent had been paid in

 


 

advance.

 


 

 

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