Prepare the necessary period-end adjustment entries for each individual case listed below.

Case 1

The Sleater-Kinney Company started the year with a $3,000 balance in the Materials account. $8,500 worth of additional materials were purchased during the year. A physical material count at year-end revealed that $7,400 worth of materials were used during the year. No correction entries were made until the end of the year.

Durum 2

Western Company has a calendar year-end accounting period. On July 1, the company purchased equipment for $30,000. The equipment is estimated to lose $300 in value each month. No correction entries were made until the end of the year.

Durum 3

Ranch Realty is in several condominium rental businesses and prepares monthly financial statements. It was determined that 3 tenants in the apartment with a monthly salary of 900 TL and 1 tenant in the apartment with a monthly salary of 1,200 TL did not pay their rent for August as of 31 August.

S2:

On June 1, Mother Hips Garment Company purchased equipment for $90,000, paid $20,000 in cash and signed a 9%, 2-month promissory note for the remaining balance. The equipment is expected to depreciate $18,000 each year. Mother Hips Apparel Company prepares monthly financial statements.

Instructions

(a) Prepare the general journal to record the purchase of the equipment on 1 June.

(b) Prepare the correction journal entries to be made by 30 June.

(c) Show how the equipment will reflect on Mother Hips Garment Company's balance sheet as of June 30.

Answer rating: 100% (QA)

Case 1 a Purchase of materials on January 1 Debit Materials Ac 8500 Credit Accounts Payable Ac 8500 ... View the full answer