A review of the ledger of Splish Brothers Inc. on December 31 produces the following data for
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Question:
- A review of the ledger of Splish Brothers Inc. on December 31 produces the following data for the preparation of annual adjusting entries:
- 1. Salaries and Wages Payable, $0. There are 7 salaried employees. 5 employees receive a salary of $1,270 each per week, and 2 employees earn $650 each per week. Employees do not work weekends. All employees worked two days after the last pay period and before December 31.
- 2. Unearned Rent Revenue, $409,290. The company began subleasing condos in its new building on November 1. Each tenant has to make a $5,370 security deposit that is not refundable until occupancy is ended.
- On December 31, the company had the following rental contracts that were paid in full for the entire term of the lease: Date Term (in months) Monthly Rent Number of Leases Nov. 1 6 $4,000 5 Dec. 1 6 $10,040 4 3. Prepaid Advertising, $15,300. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines.
- The terms of the contracts are as follows: Contract Date Amount Number of magazines Issues A650 May 1 $7,260 12 B974 Oct. 1 8,040 24 The first advertisement runs in the month in which the contract is signed. 4. Notes Payable, $79,800. This balance consists of a one-year, 7%, note that is dated June 1. Collapse question part (a) Prepare the adjusting entries on December 31.
Related Book For
Intermediate Accounting
ISBN: 978-0176509736
10th Canadian Edition, Volume 1
Authors: Donald Kieso, Jerry Weygandt, Terry Warfield, Nicola Young,
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