P$4-4($ONLY NEED HELP ON P$4-4)($P$4-2$ IS FOR CONTEXT$)$

LO$4-1$

Determining Financial Statement Effects of Adjusting Entries $($AP$4-4)$

Refer to the information regarding Zimmerman Company in P$4-2.$

Required:

Indicate whether each transaction relates to a deferred revenue, deferred expense, accrued revenue, or accrued expense.

Using the following headings, indicate the effect of each adjusting entry and the amount of the effect. Use $+$ for increase, $-$ for decrease, and NE for no effect. $($Reminder: Assets

$=$ Liabilities $+$ Stockholders' Equity; Revenues $-$ Expenses $=$ Net Income; and Net Income accounts are closed to Retained Earnings, a part of Stockholders' Equity.$)$ P$4-2$

LO$4-1$

Recording Adjusting Entries $($AP$4-2)$

All of the current year's entries for Zimmerman Company have been made, except the following adjusting entries. The company's annual accounting year ends on December $31.$

a$.$ On September $1$ of the current year, Zimmerman collected six months' rent of $$9,600$ on storage space. At that date, Zimmerman debited Cash and credited Unearned Rent Revenue

for $$9,600.$

b$.$ On October $1$ of the current year, the company borrowed $$18,000$ from a local bank and signed a one$-$year, $12$ percent note for that amount. The principal and interest are payable on

the maturity date.

c$.$ Depreciation of $$4,400$ must be recognized on a service truck purchased in July of the current year at a cost of $$22,000.$

d$.$ Cash of $$3,000$ was collected on November $1$ of the current year for services to be rendered evenly over the next year beginning on November $1$ of the current year. Unearned Service

Revenue was credited when the cash was received.

e$.$ On November $1$ of the current year, Zimmerman paid a one$-$year premium for property insurance, $$8,400,$ for coverage starting on that date. Cash was credited and Prepaid Insurance

was debited for this amount.

f$.$ The company earned service revenue of $$4,000$ on a special job that was completed December $29$ of the current year. Collection will be made during January of the next year. No

entry has been recorded.

g$.$ At December $31$ of the current year, wages earned by employees totaled $$14,000.$ The employees will be paid on the next payroll date in January of the next year.

h$.$ On December $31$ of the current year, the company estimated it owed $$400$ for this year's property taxes on land. The tax will be paid when the bill is received in January of next year.

Tip

Reminder: When you need to create a new

account title, be as specific as possible. For example,

property taxes would not be called income taxes.

Required:

Indicate whether each transaction relates to a deferred revenue, deferred expense, accrued revenue, or accrued expense.

Give the adjusting entry required for each transaction at December $31$ of the current year.