COMMERCE 1AA3 Lecture 6: Lecture 6
12 Oct 2017
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Example: on april, a publishing company receives ,000 in newspaper subscriptions. The subscriptions are for one year: unearned revenues. Assuming this company prepares nancial statements monthly, prepare the adjusting entry as of april 30: none, adjusting for may 30, subscription revenue = 12,000 / 12 x 1 = 1,000. What is the balance of ur on december 31, 2017: ,000. On november 1, a company paid ,000 for a 3 year insurance policy, with coverage starting immediately. Assuming this company prepares nancial statements monthly, prepare the adjusting entry as of november 30. Monthly insurance expense = 36,000 / 36 = 1,000. Earned, but not recorded revenues (as of scal period end) Incurred but not recorded expenses (as of scal year end) Utilities, salaries, interest on bank loans, employees paid bi-weekly (money is earned but not yet paid) Ending balance = beginning balance + in - out. Ending re = beginning re +net income - dividends.
