Dodie Company completed its first year of operations on December 31. All of the years entries have
Question:
Dodie Company completed its first year of operations on December 31. All of the year’s entries have been recorded except for the following:
a. At year-end, employees earned wages of $4,000, which will be paid on the next payroll date in January of next year.
b. At year-end, the company had earned interest revenue of $1,500. The cash will be collected March 1 of the next year.
Required:
1. What is the annual reporting period for this company?
2. Identify whether each transaction results in adjusting a deferred or an accrued account. Using the process illustrated in the chapter, prepare the required adjusting entry for transactions (a) and (b). Include appropriate dates and write a brief explanation of each entry.
3. Why are these adjustments made?
Step by Step Answer:
Financial Accounting
ISBN: 9781264229734
11th Edition
Authors: Robert Libby, Patricia Libby, Frank Hodge