The Information necessary for preparing the December 31, 2021 year-end adjusting entries for Vito's Pizza Parlor...
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The Information necessary for preparing the December 31, 2021 year-end adjusting entries for Vito's Pizza Parlor appears below. Vito's fiscal year-end is December 31. a. On July 1, 2021, purchased $14,000 of IBM Corporation bonds at face value. The bands pay interest twice a year on January 1 and July 1. The annual Interest rate is 10% b. Vito's depreciable equipment has a cost of $27,200, a four-year life, and no salvage value. The equipment was purchased in 2019. The straight-line depreciation method is used. c. On November 1, 2021, the bar ares was leased to Jack Donaldson for one year. Vito's received $8,400 representing the first six months rent and credited deferred rent revenue. d. On April 1, 2021, the company paid $3,360 for a two-year fire and liability Insurance policy and debited Insurance expense. On October 1, 2021, the company borrowed $28,000 from a local bank and signed a note. Principal and interest at 10% will be paid on September 30, 2022 At year-end, there is a $2,200 debit balance in the supplies (asset) account. Only $780 of supplies remain on hand. Required: 1. Prepare the necessary adjusting journal entries at December 31, 2021. 2. Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore Income tax expense.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore income tax expense.) (Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.) Income Overstated (Understated) Adjustments to revenues Adjustments to expenses: The Information necessary for preparing the December 31, 2021 year-end adjusting entries for Vito's Pizza Parlor appears below. Vito's fiscal year-end is December 31. a. On July 1, 2021, purchased $14,000 of IBM Corporation bonds at face value. The bands pay interest twice a year on January 1 and July 1. The annual Interest rate is 10% b. Vito's depreciable equipment has a cost of $27,200, a four-year life, and no salvage value. The equipment was purchased in 2019. The straight-line depreciation method is used. c. On November 1, 2021, the bar ares was leased to Jack Donaldson for one year. Vito's received $8,400 representing the first six months rent and credited deferred rent revenue. d. On April 1, 2021, the company paid $3,360 for a two-year fire and liability Insurance policy and debited Insurance expense. On October 1, 2021, the company borrowed $28,000 from a local bank and signed a note. Principal and interest at 10% will be paid on September 30, 2022 At year-end, there is a $2,200 debit balance in the supplies (asset) account. Only $780 of supplies remain on hand. Required: 1. Prepare the necessary adjusting journal entries at December 31, 2021. 2. Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore Income tax expense.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore income tax expense.) (Amounts to be deducted should be indicated by a minus sign. Do not round intermediate calculations.) Income Overstated (Understated) Adjustments to revenues Adjustments to expenses:
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Adjusting Journal Entries at December 31 2021 a To record accrued interest on IBM Corporation bonds ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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