E account and 1 balance sheet account, but never changes the fixed asset account. statement 3....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
E account and 1 balance sheet account, but never changes the fixed asset account. statement 3. The Ledger of the Day Company includes the following accounts. Briefly explain why each account may require an adjustment (Adjusting Entry AJE) a) Prepaid Insurance- b) Salary Expense - c) Interest Payable - d) Service Fees Earned - e) Unearned Revenue - f) Depreciation Expense - 4. Emery Corporation encounters the following situations. Identify what type of adjusting entry (deferred expense, deferred revenue, accrued revenue, or accrued expense) is needed on December 31, 20X1 in each situation and why it qualifies as that type. Also, please show the initial journal entry if there was one, NOT THE ADJUSTING ENTRY. So, only the Deferrals will have journal entries shown here. a) Emery received $2,000 cash for future services to be preformed and recorded a liability at the time the cash was received. As of Dec. 31, 20X1, half of this has been earned. Type-Ruenne Why-cash received without corresponding delivery liability not Account Name recorded entry involves 1 Ime income Date 12/31 cash 1213 un earned revenue $2000 b) Emery's employees worked 3 days in 20X1 earning $1,500. The company will pay them in early 20X2. Why Not paid yet Type - Expense Why - Not Date Account Name 2011 2021 (c) Emery paid and December 1 Type - Date Date 11 H Expense why- fent is Account Name PR Debit $ 2000 Cash uneurned Salaries expense -1500 Salarles payable properly recorded $4,000 of rent on December 1, 20X1 for the next 4 months starting $ 1500 revenue Debit earlier is paid ewler and later on used PR Debit Credit 4000 $ Credit Mol cash 12/0 unearned revenue $ 4000 (d) Emery collected $2,500 cash from a customer in November 20X1 for services to be performed in 20X2. Credit Type - revenue why- Cash is received and services and revenue is recognized_ Account Name PR Debit Credit 2500 $ $2500 Type Date MA MA (e) Emery borrowed $10,000 on October 1, 20X1 by signing an 12% one-year note payable. Interest = $300 [$10,000* 12% *(3/12) (P*R*T)] Type - expense Date (0/0 10/01 $300 (f) Emery paid $1,200 cash on July 1, 20X1 for 12 months of insurance expense and recorded it as an asset. Type - Expense Why - Pre-payment of insurance 12 months but 6 months expired Date Account Name PR Credit 07/01 insurance expense 07/0 Prepald $1200 g) Emery performed services worth $2,000 on December 28, 20X1 and billed the customer on January 3, 20X2. Payment Date 12/28 12/28 Type-revenue Why- Why-interest is incurred for 3 months → payable Account Name PR Debit Credit 11 300 interest expense interest payable 12 12 Type - expense Date Account Name Accounts receivable Service 01/9 ob Date NIA MA revenue Type - expense Why - Expense incurred Date Account Name PR of h) Emery received a utility billing of $800 in January 20X2 for the utilities used in December 20X1. but pund later utilities expense utilities payable why - Early Account Name Supplies PR is made Debit i) Emery purchased $900 of supplies on account in December 20X1 of which, at year end, $200 of the supplies remains unused. expense Supplies Debit $1200 $2000 Deprication expense Accumulated deprication Accounts rece/vable Service revenue Debit $ 800 Early payment of supplies and expense PR Debit Credit $700 PR Credit $2000 j) Emery purchased machinery for $10,000 on January 1, 20X1 by signing a Note Payable; the company thinks the equipment will be used for the next 5 years helping the company earn revenue. Why - Deprention is incurred Type - expense Date Account Name Debit $12000 Credit $ 800 $2500 $700 $2000 is earned but not paid. (k) Emery earned $2,500 of revenues but has not yet recorded the transaction or received the cash. Type-revenue Why- Revenues Account Name PR Debit Credit Credit $2500 5. The situations in Exercise #4 that will be requiring an adjusting entry at the 20X1 year end are: a,b,c,e,f,g,h,i,j,&k. The remaining situation was properly handled when it was journalized and does not require an entry at the end of the year to adjust. (1) Prepare the adjusting entry in the following journal. Posting References are not needed because you will not post these. Omit explanations and skip lines between entries. (2) After making the adjusting entries required, how much will the Net Income change (Increase? Decrease?) Date (a) b] (c) e] f) [g) (h) 0 m (k) GENERAL JOURNAL Account Name PR Debit Page 6 Credit E account and 1 balance sheet account, but never changes the fixed asset account. statement 3. The Ledger of the Day Company includes the following accounts. Briefly explain why each account may require an adjustment (Adjusting Entry AJE) a) Prepaid Insurance- b) Salary Expense - c) Interest Payable - d) Service Fees Earned - e) Unearned Revenue - f) Depreciation Expense - 4. Emery Corporation encounters the following situations. Identify what type of adjusting entry (deferred expense, deferred revenue, accrued revenue, or accrued expense) is needed on December 31, 20X1 in each situation and why it qualifies as that type. Also, please show the initial journal entry if there was one, NOT THE ADJUSTING ENTRY. So, only the Deferrals will have journal entries shown here. a) Emery received $2,000 cash for future services to be preformed and recorded a liability at the time the cash was received. As of Dec. 31, 20X1, half of this has been earned. Type-Ruenne Why-cash received without corresponding delivery liability not Account Name recorded entry involves 1 Ime income Date 12/31 cash 1213 un earned revenue $2000 b) Emery's employees worked 3 days in 20X1 earning $1,500. The company will pay them in early 20X2. Why Not paid yet Type - Expense Why - Not Date Account Name 2011 2021 (c) Emery paid and December 1 Type - Date Date 11 H Expense why- fent is Account Name PR Debit $ 2000 Cash uneurned Salaries expense -1500 Salarles payable properly recorded $4,000 of rent on December 1, 20X1 for the next 4 months starting $ 1500 revenue Debit earlier is paid ewler and later on used PR Debit Credit 4000 $ Credit Mol cash 12/0 unearned revenue $ 4000 (d) Emery collected $2,500 cash from a customer in November 20X1 for services to be performed in 20X2. Credit Type - revenue why- Cash is received and services and revenue is recognized_ Account Name PR Debit Credit 2500 $ $2500 Type Date MA MA (e) Emery borrowed $10,000 on October 1, 20X1 by signing an 12% one-year note payable. Interest = $300 [$10,000* 12% *(3/12) (P*R*T)] Type - expense Date (0/0 10/01 $300 (f) Emery paid $1,200 cash on July 1, 20X1 for 12 months of insurance expense and recorded it as an asset. Type - Expense Why - Pre-payment of insurance 12 months but 6 months expired Date Account Name PR Credit 07/01 insurance expense 07/0 Prepald $1200 g) Emery performed services worth $2,000 on December 28, 20X1 and billed the customer on January 3, 20X2. Payment Date 12/28 12/28 Type-revenue Why- Why-interest is incurred for 3 months → payable Account Name PR Debit Credit 11 300 interest expense interest payable 12 12 Type - expense Date Account Name Accounts receivable Service 01/9 ob Date NIA MA revenue Type - expense Why - Expense incurred Date Account Name PR of h) Emery received a utility billing of $800 in January 20X2 for the utilities used in December 20X1. but pund later utilities expense utilities payable why - Early Account Name Supplies PR is made Debit i) Emery purchased $900 of supplies on account in December 20X1 of which, at year end, $200 of the supplies remains unused. expense Supplies Debit $1200 $2000 Deprication expense Accumulated deprication Accounts rece/vable Service revenue Debit $ 800 Early payment of supplies and expense PR Debit Credit $700 PR Credit $2000 j) Emery purchased machinery for $10,000 on January 1, 20X1 by signing a Note Payable; the company thinks the equipment will be used for the next 5 years helping the company earn revenue. Why - Deprention is incurred Type - expense Date Account Name Debit $12000 Credit $ 800 $2500 $700 $2000 is earned but not paid. (k) Emery earned $2,500 of revenues but has not yet recorded the transaction or received the cash. Type-revenue Why- Revenues Account Name PR Debit Credit Credit $2500 5. The situations in Exercise #4 that will be requiring an adjusting entry at the 20X1 year end are: a,b,c,e,f,g,h,i,j,&k. The remaining situation was properly handled when it was journalized and does not require an entry at the end of the year to adjust. (1) Prepare the adjusting entry in the following journal. Posting References are not needed because you will not post these. Omit explanations and skip lines between entries. (2) After making the adjusting entries required, how much will the Net Income change (Increase? Decrease?) Date (a) b] (c) e] f) [g) (h) 0 m (k) GENERAL JOURNAL Account Name PR Debit Page 6 Credit
Expert Answer:
Answer rating: 100% (QA)
a Prepaid Insurance Explanation Prepaid insurance represents the amount paid in advance for insurance coverage Over time as the coverage is consumed the prepaid amount should be recognized as an expen... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these accounting questions
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
The stockholders' equity accounts of Whispering Company have the following balances on December 31, 2025. Common stock, $10 par, 304,000 shares issued and outstanding $3,040,000 Paid-in capital in...
-
What is the role of expectations and the risk premium in the asset market or portfolio balance approach? Why was there no risk premium in the monetary approach?
-
Bobby Cook is trying to capture the attention of Black Friday shoppers for OptiShop, a discount chain with 1,500 stores in Canada and the United States. Bobby wants to offer a tabletop 3D printer at...
-
Copy your worksheet from Question 6 into another worksheet. Change the increase from 10% to 18%. Protect the worksheet, so that changes cannot be made. Question 6 Open a new spreadsheet. Type...
-
Putnam Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials1 pound plastic at $7.00 per pound ....$ 7.00 Direct labor1.5 hours at $12.00...
-
The local theater company is choosing its next play. The company's members recently held a vote to decide which of three choices - Elektra, Tartuffe, and Hamlet - the company will perform. The...
-
The following data relates to Prism traders limited for the year ended 31st December, 2018. Shs Cash and marketable securities Fixed Assets Sales Net Income Quick Ratio Current Ratio Average...
-
M/S Unity Hospital of Jamaica has two groups of Directors. A dispute arose between the two groups out of which one group controlled the majority of shares. A very serious situation arose in the...
-
A triangular prism has base edges 4cm,5cm, and 8cm long. Its lateral area is 408cm^(2). What is the height of the prism?
-
Choice #2 The term "reasonable" is used quite frequently in the Canadian legal System. Discuss how this term is used throughout Canadian Law in the following areas: A) The Canadian Charter of Rights...
-
Ivan made a scaled copy of the following triangle. He used a scale factor less than 1. What could be the length of the base of the scaled copy of the triangle? Choose 3 answers:
-
3. use indentation. Save the java file as Decimal MathUsing Integers.java in your lab4 folder. Compile the program and run it. Make sure that your program outputs what you see in Figure 2. If you...
-
A regular nentagon is shown with lengths in centimeters (cm). What is the area of the pentagon? A ,75.375cm^(2) B,150.75cm^(2) C 180.25cm^(2) D 301.5cm^(2)
-
William and Kate file their federal individual income tax return as a married filing joint. Their 2020 income tax facts are: Williams wages: $200,000 Kates wages: 240,000 Long-term capital loss from...
-
Compare and contrast licensing and subcontracting.
-
Fisafolia Corporation has gross income from operations of $220,000 and operating expenses of $160,000 for 2012. The corporation also has $20,000 in dividends from publicly traded domestic...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family. The Incisors own a rental beach house in Hawaii. The beach house was rented for the full year during 2012...
-
Karim Depak received a Form 1099-B showing the following stock transactions and basis during 2012: None of the stock is qualified small business stock. Calculate Karim's net capital gain or loss...
-
If a person has a highly elastic demand, will he likely bear a large or small percentage of the burden of a tax?
-
Minneapolis Federal Reserve Bank economist Edward Prescott estimates the elasticity of the U.S. labor supply to be 3. Given this elasticity, what would be the impact of funding the Social Security...
-
How much of a $100 tax would a consumer pay if elasticity of demand is 0.2 and elasticity of supply is 1.8?
Study smarter with the SolutionInn App