Scientific Products exercise (adjustment, closing income statement and balance sheet) Scientific Products Inc has the following...

     

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Scientific Products exercise (adjustment, closing income statement and balance sheet) Scientific Products Inc has the following balance sheet as of 31st December 2020. Assets Non-current assets Equipment (Accumulated depreciation) Current assets Inventory Accounts receivable Cash Total assets Journal: Number 1 The journal entries for the year 2021 are as follows: 2 3 4 5 6 7 8 Account Purchase of merchandise Accounts payable Accounts receivable cash revenue Taxes payable cash Cash Accounts payable cash Insurance expense cash cash Accounts receivable 300 € 400 € 100 € 800 € 200 € 100 € 500 € 1,100 € Cash revenue Bank loan Equity Share capital Retained earnings Total equity Liabilities Accounts payable Taxes payable Total liabilities Total equity+liabilities Debit 300 € 250 € 150 € 50 € 20 € 250 € 120 € 72 € 200 € 700 € 100 € 800 € Credit 250 € 50 € 300 € 1,100 € 300 € 400 € 50 € 20 € 250 € 120 € 72 € 200 € Please choose the correct adjustment entries : 15. Adjustment for inventory: the ending inventory was 100. 1) Debit to inventory (100); credit to change in inventory (100) 2) Debit to change in inventory (200); credit to inventory (200) 3) Debit to change in inventory (100); credit to inventory (100) 4) Debit to inventory (200); credit to change in inventory (200) 16. On 1st May, the company paid insurance for the amount of 120 euros (transaction 6) for one year. 1) Debit to insurance expense (50); credit to prepaid insurance (50) 2) Debit to Prepaid insurance (50); credit to insurance expense (50) 3) Debit to prepaid insurance (40); credit to insurance expense (40) 4) Debit to insurance expense (40); credit to prepaid insurance (40) 17. On 30th November, Scientific Products Inc received cash from a customer (transaction 7), but the goods have not been delivered yet. Scientific Products Inc will provide the goods next year. 1) Debit to revenue (72); credit to cash (72) 2) Debit to revenue (72); credit to unearned revenue (72) 3) Debit to unearned revenue (72); credit to revenue (72) 4) Debit to cash (72); credit to unearned revenue (72) 18. Reflect the depreciation of the equipment. It has a useful life of 4 years. The equipment was bought on 1st January 2020 for the amount of 400 euros. 1) Debit to accumulated depreciation (400); credit to equipment (400) 2) Debit to depreciation expense (100); credit to accumulated depreciation (100) 3) Debit to depreciation expense (100); credit to equipment (100) 4) Debit to accumultated depreciation (200); credit to depreciation expense (200) 19. Scientific Products Inc received a bank loan the 1st July 2021 (transaction 8), please compute the interest expense. The anual interest rate is 10%, and is going to be paid the loan and interest the following year. 1) Debit to interest expense (10); credit to interest payable (10) 2) Debit to interest expense (11.67); credit to interest payable (11.67) 3) Debit to interest expense (100); cash (100) 4) Debit to interest payable (10); credit to interest expense (10) Scientific Products exercise (adjustment, closing income statement and balance sheet) Scientific Products Inc has the following balance sheet as of 31st December 2020. Assets Non-current assets Equipment (Accumulated depreciation) Current assets Inventory Accounts receivable Cash Total assets Journal: Number 1 The journal entries for the year 2021 are as follows: 2 3 4 5 6 7 8 Account Purchase of merchandise Accounts payable Accounts receivable cash revenue Taxes payable cash Cash Accounts payable cash Insurance expense cash cash Accounts receivable 300 € 400 € 100 € 800 € 200 € 100 € 500 € 1,100 € Cash revenue Bank loan Equity Share capital Retained earnings Total equity Liabilities Accounts payable Taxes payable Total liabilities Total equity+liabilities Debit 300 € 250 € 150 € 50 € 20 € 250 € 120 € 72 € 200 € 700 € 100 € 800 € Credit 250 € 50 € 300 € 1,100 € 300 € 400 € 50 € 20 € 250 € 120 € 72 € 200 € Please choose the correct adjustment entries : 15. Adjustment for inventory: the ending inventory was 100. 1) Debit to inventory (100); credit to change in inventory (100) 2) Debit to change in inventory (200); credit to inventory (200) 3) Debit to change in inventory (100); credit to inventory (100) 4) Debit to inventory (200); credit to change in inventory (200) 16. On 1st May, the company paid insurance for the amount of 120 euros (transaction 6) for one year. 1) Debit to insurance expense (50); credit to prepaid insurance (50) 2) Debit to Prepaid insurance (50); credit to insurance expense (50) 3) Debit to prepaid insurance (40); credit to insurance expense (40) 4) Debit to insurance expense (40); credit to prepaid insurance (40) 17. On 30th November, Scientific Products Inc received cash from a customer (transaction 7), but the goods have not been delivered yet. Scientific Products Inc will provide the goods next year. 1) Debit to revenue (72); credit to cash (72) 2) Debit to revenue (72); credit to unearned revenue (72) 3) Debit to unearned revenue (72); credit to revenue (72) 4) Debit to cash (72); credit to unearned revenue (72) 18. Reflect the depreciation of the equipment. It has a useful life of 4 years. The equipment was bought on 1st January 2020 for the amount of 400 euros. 1) Debit to accumulated depreciation (400); credit to equipment (400) 2) Debit to depreciation expense (100); credit to accumulated depreciation (100) 3) Debit to depreciation expense (100); credit to equipment (100) 4) Debit to accumultated depreciation (200); credit to depreciation expense (200) 19. Scientific Products Inc received a bank loan the 1st July 2021 (transaction 8), please compute the interest expense. The anual interest rate is 10%, and is going to be paid the loan and interest the following year. 1) Debit to interest expense (10); credit to interest payable (10) 2) Debit to interest expense (11.67); credit to interest payable (11.67) 3) Debit to interest expense (100); cash (100) 4) Debit to interest payable (10); credit to interest expense (10)

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