Luong Corporation encounters the following situations: 1. Luong collects $1,300 from a customer in 2020 for services

Question:

Luong Corporation encounters the following situations:
1. Luong collects $1,300 from a customer in 2020 for services to be performed in 2021.
2. Luong incurs utility expense which is not yet paid in cash or recorded.
3. Luong’s employees worked 3 days in 2020 but will not be paid until 2021.
4. Luong performs services for customers but has not yet received cash or recorded the transaction.
5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1.
6. Luong received cash for future services and recorded a liability until the service was performed.
7. Luong performed consulting services for a client in December 2020. On December 31, it had not billed the client for services provided of $1,200.
8. Luong paid cash for an expense and recorded an asset until the item was used up.
9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies remain unused.
10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years.
11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable.


Instructions
Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Principles

ISBN: 978-1119411482

13th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Question Posted: