Terrific Temps fills temporary employment positions for local businesses. Some businesses pay in advance for services; others
Question:
Other Data
1. Accrued but unrecorded fees earned as of December 31, year 1, amount to $1,500.
2. Records show that $2,500 of cash receipts originally recorded as unearned fees had been earned as of December 31.
3. The company purchased a six-month insurance policy on September 1, year 1, for $1,800.
4. On December 1, year 1, the company paid its rent through February 28, year 2.
5. Office supplies on hand at December 31 amount to $400.
6. All equipment was purchased when the business first formed. The estimated life of the equipment at that time was 10 years (or 120 months).
7. On August 1, year 1, the company borrowed $12,000 by signing a 6-month, 8 percent note payable. The entire note, plus 6 months' accrued interest, is due on February 1, year 2.
8. Accrued but unrecorded salaries at December 31 amount to $2,700.
9. Estimated income taxes expense for the entire year totals $15,000. Taxes are due in the first quarter of year 2.
Instructions
a. For each of the numbered paragraphs, prepare the necessary adjusting entry (including an explanation).
b. Determine that amount at which each of the following accounts will be reported in the company's year 1 income statement.
1. Fees Earned
2. Travel Expense
3. Insurance Expense
4. Rent Expense
5. Office Supplies Expense
6. Utilities Expense
7. Depreciation Expense: Equipment
8. Interest Expense
9. Salaries Expense
10. Income Taxes Expense
c. The unadjusted trial balance reports dividends of $3,000. As of December 31, year 1, have these dividends been paid? Explain.
Step by Step Answer:
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello