33:010:272 Lecture 3: Week 3 - Part 2 - 02_06_2019

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peargiraffe909

7 Feb 2019

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Receipt of cash that is recorded as a liability because the service has not been performed. Adjusting entry is made to record the revenue for services performed during the period and to show the liability that remains. Selling a gift card is unearned revenue, the store has not given you anything yet. Revenues for services performed but not yet recorded at the statement date (accrued revenue) Revenues for services performed but not yet received in cash or recorded. Adjusting entry records the receivable that exists and records the revenues for services performed. Expenses incurred but not yet paid in cash or recorded. Prepared after all adjusting entries are journalized and posted. Purpose is to prove the equality of debit balances and credit balances. Careers in auditing, taxation, and management consulting serving the general public. Careers in industry working in cost accounting, budgeting, accounting information systems, and taxation.

Related Questions

Hart Corporation encounters the following situations:

Identify what type of adjusting entry (prepaid expense, unearnedrevenue, accrued expense, or accrued revenue) is needed in eachsituation at December 31, 2015.

-A.B.C.D.	Hart collects $1,300 from a customer in 2015 for services to beperformed in 2016.
-A.B.C.D.	Hart incurs utility expense which is not yet paid in cash orrecorded.
-A.B.C.D.	Hart's employees worked 3 days in 2015 but will not be paiduntil 2016.
-A.B.C.D.	Hart performs services for customers but has not yet receivedcash or recorded the transaction.
-A.B.C.D.	Hart paid $2,400 rent on December 1 for the 4 months startingDecember 1.
-A.B.C.D.	Hart received cash for future services and recorded a liabilityuntil the service was performed.
-A.B.C.D.	Hart performed consulting services for a client in December2015. On December 31, it had not billed the client for servicesperformed of $1,200.
-A.B.C.D.	Hart paid cash for an expense and recorded an asset until theitem was used up.
-A.B.C.D.	Hart purchased $900 of supplies in 2015; at year-end, $400 ofsupplies remain unused.
-A.B.C.D.	Hart purchased equipment on January 1, 2015; the equipment willbe used for 5 years.
-A.B.C.D.	Hart borrowed $10,000 on October 1, 2015, signing an 8% one-yearnote payable.

A.	Unearned Revenue
B.	Accrued Expense
C.	Accrued Revenue
D.	Prepaid Expenses

tancod723

Question 16

Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?

		Debit: Cash $7,000 Credit: Salaries/Wages Expense$5,000 Credit: Advertising Expense $2,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Cash$7,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Salaries/Wages Payable$5,000 Credit: Accounts Payable$2,000
		Debit: Salaries/Wages Expense$5,000 Debit: Advertising Expense $2,000 Credit: Cash$8,000

3 points

Question 17

Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?

		Accrued revenues have not been earned and unearned revenues havebeen earned.
		Accrued revenues have been paid and unearned revenues havenot.
		Accrued revenues have not been recorded and unearned revenueshave been recorded.
		Accrued revenues have been recorded and unearned revenues havebeen recorded.

3 points

Question 18

Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:

		debit Unearned Service Revenue, $3,000; credit Cash, $3,000.
		debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000.
		debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500.
		debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500.

3 points

Question 19

Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:

		debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300.
		debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300.
		debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700.
		debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700.

3 points

Question 20

Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:

		debit Rent Expense, $13,500; credit Prepaid Rent, $13,500.
		debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500.
		debit Prepaid Rent, $1,500; credit Rent Expense, $1,500.
		debit Rent Expense, $1,500; credit Prepaid Rent, $1,500.

3 points

Question 21

Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?

		$40,000
		$38,500
		$37,700
		$35,000

3 points

Question 22

Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?

		$13,000
		$12,000
		$9,750
		$9,000

3 points

Question 23

Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?

		$1.67
		$0.48
		$2.08
		$0.60

3 points

Question 24

Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?

		5%
		10%
		20%
		40%

3 points

Question 25

Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?

		March 31
		April 6
		April 15
		April 20

apricotbutterfly16

Terrific Temps fills temporary employment positions for localbusinesses. Some businesses pay in
advance for services; others are billed after services have beenperformed. Advanced payments are
credited to an account entitled Unearned Fees. Adjusting entriesare performed on a monthly basis.
An unadjusted trial balance dated December 31, 2015, follows. (Bearin mind that adjusting entries
have already been made for the first 11 months of 2015, but not forDecember.)

TERRIFIC TEMPS UNADJUSTED TRIAL BALANCE DECEMBER 31, 2015
Cash	$	27,020
Accounts receivable		59,200
Unexpired insurance		900
Prepaid rent		3,000
Office supplies		600
Equipment		60,000
Accumulated depreciation: equipment			$	29,500
Accounts payable				4,180
Notes payable				12,000
Interest payable				320
Unearned fees				6,000
Income taxes payable				4,000
Unearned revenue				20,000
Retained earnings				49,000
Capital stock				25,000
Dividends		3,000
Feesearned				75,000
Travel expense		5,000
Insurance expense		2,980
Rentexpense		9,900
Office supplies expense		780
Utilities expense		4,800
Depreciation expense: equipment		5,500
Salaries expense		30,000
Interest expense		320
Income taxes expense		12,000

	$	225,000	$	225,000

Other Data
1.	Accrued butunrecorded fees earned as of December 31, 2015, amount to$1,500.
2.	Records showthat $2,500 of cash receipts originally recorded as unearned feeshad been earned as of December 31.
3.	The companypurchased a six-month insurance policy on September 1, 2015, for$1,800.
4.	On December 1,2015, the company paid its rent through February 28, 2016.
5.	Office supplieson hand at December 31 amount to $400.
6.	All equipment was purchased when the business first formed. Theestimated life of the equipment at that time was 10 years (or 120months).
7.	On August 1, 2015, the company borrowed $12,000 by signing asix-month, 8 percent note payable. The entire note, plus sixmonths' accrued interest, is due on February 1, 2016.
8.	Accrued butunrecorded salaries at December 31 amount to $2,700.
9.	Estimated incometaxes expense for the entire year totals $15,000. Taxesare due in the first quarter of 2016.

Instructions

a.	For each of thenumbered paragraphs, prepare the necessary adjusting entry.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.)

Journal Entry Worksheet

Record the accrued but uncollected fees earned.

Record fees earned as of December 31st.

Record the December insurance expense.

Record the December rent expense.

Record the offices supplies used in December.

Record the December depreciation expense.

Record the interest accrued in December.

Record the salaries accrued in December.

Record the income taxes accrued in December.

Dec. 31

*Enter debits before credits


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

The unadjusted trial balance reportsdividends of $3,000. As of December 31, 2015, have these dividendsbeen paid?

	Yes
	No

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33:010:272 Lecture 3: Week 3 - Part 2 - 02_06_2019

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