Midwest Manufacturing purchased a three- year insurance policy for $ 30,000 on January 2, 2015. Prepare any journal entries, adjusting journal entries, and closing journal entries required on January 2, 2015, December 31, 2015, and December 31, 2016. Summarize these entries in T- accounts for Prepaid Insurance, Insurance Expense, Cash, and Retained Earnings. Assume the January 2, 2015, balances in these accounts were $ 0, $ 0, $ 90,000, and $ 80,000, respectively. Given only the entries for insurance, indicate what amounts would be reported for each of these accounts on the balance sheet and income statement prepared on December 31, 2015, and December 31, 2016.
Answer to relevant QuestionsMatch each transaction with the type of adjustment that will be required, by entering the appropriate letter in the space provided. In what ways can independent verification occur? What are the arguments for and against replenishing all petty cash funds at the end of each accounting period? Indicate (Yes or No) whether each of the following is properly included in Cash and Cash Equivalents. _______ 1. $ 10,000 of government Treasury bills purchased 10 days prior to their maturity. _______ 2. $ 50,000 of ...Indicate whether the following items would be added (+) or subtracted (–) from the company’s books or the bank statement side of a bank reconciliation.
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