HUMA 2640 Lecture Notes - Lecture 98: Accounts Payable, Financial Statement, Income Statement

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salmonpanda594

4 Dec 2017

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The following are the account balances on december 31, 2015 for an internet caf in sudbury, ontario called cardinal caf : The following adjustment and closing entries must be made before preparing the financial statements: The ,800 insurance for the entire year was prepaid on january 1, 2015. A journal entry must be made to show that the quarter of prepaid insurance has being used. The $ 8,400 rent for the year was paid in advance on january 1, 2015. A journal entry must be made to show that the final month of the prepaid rent has been used. In january 2012 equipment for the caf was rented for 5 years at a cost of ,000, which was paid in advance. A journal entry must be made to show the current year"s equipment rental expense. Supplies remaining on december 31 are valued at . The office furniture has an estimated useful life is 5 years and salvage value of .

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Pitman Company is a small editorial services company owned andoperated by Jan Pitman. On October 31, 2019 the end of the currentyear, Pitman Companyâs accounting clerk prepared the followingunadjusted trial balance:

Pitman Company

UNADJUSTED TRIAL BALANCE

October 31, 2019

	ACCOUNTTITLE	DEBIT	CREDIT
1	Cash	7,500.00
2	Accounts Receivable	38,400.00
3	Prepaid Insurance	7,200.00
4	Supplies	1,980.00
5	Land	112,500.00
6	Building	300,250.00
7	Accumulated Depreciation-Building		87,550.00
8	Equipment	135,300.00
9	Accumulated Depreciation-Equipment		97,950.00
10	Accounts Payable		12,150.00
11	Unearned Rent		6,750.00
12	Jan Pitman, Capital		371,000.00
13	Jan Pitman, Drawing	15,000.00
14	Fees Earned		324,600.00
15	Salaries and Wages Expense	193,370.00
16	Utilities Expense	42,375.00
17	Advertising Expense	22,800.00
18	Repairs Expense	17,250.00
19	Miscellaneous Expense	6,075.00
20	Totals	900,000.00	900,000.00

The data needed to determine year-end adjustments are asfollows:

a.	Unexpired insurance at October 31,$600.
b.	Supplies on hand at October 31,$675.
c.	Depreciation of building for theyear, $12,000.
d.	Depreciation of equipment for theyear, $8,600.
e.	Unearned rent at October 31,$2,250.
f.	Accrued salaries and wages atOctober 31, $2,800.
g.	Fees earned but unbilled on October31, $10,050.

	Required:
1.	Journalize the adjustingentries using the following additional accounts: Salaries and WagesPayable; Rent Revenue; Insurance Expense; DepreciationExpenseâBuilding; Depreciation ExpenseâEquipment; and SuppliesExpense. Refer to the Chart of Accounts for exact wording ofaccount titles.
2.	Determine the balances of theaccounts affected by the adjusting entries, and prepare an adjustedtrial balance.

CHART OF ACCOUNTSPitman CompanyGeneral Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Prepaid Insurance
14	Supplies
15	Land
16	Building
17	AccumulatedDepreciation-Building
18	Equipment
19	AccumulatedDepreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Unearned Rent
23	Salaries and Wages Payable

	EQUITY
31	Jan Pitman, Capital
32	Jan Pitman, Drawing

	REVENUE
41	Fees Earned
42	Rent Revenue

	EXPENSES
51	Salaries and Wages Expense
52	Utilities Expense
53	Advertising Expense
54	Repairs Expense
55	Depreciation Expense-Building
56	Depreciation Expense-Equipment
57	Insurance Expense
58	Supplies Expense
59	Miscellaneous Expense

1. Journalize the adjusting entries using the followingadditional accounts: Salaries and Wages Payable; Rent Revenue;Insurance Expense; Depreciation ExpenseâBuilding; DepreciationExpenseâEquipment; and Supplies Expense. Refer to the Chart ofAccounts for exact wording of account titles.

How does grading work?

PAGE 10

JOURNAL

ACCOUNTING EQUATION

Score: 164/176

	DATE	DESCRIPTION	DEBIT	CREDIT
1		Adjusting Entries
2	?	?
3		?
4	?	?	?
5		?		?
6	?	?	?
7		?		?
8	?	?	?
9		?		?
10	?	?
11		?
12	?	?	?
13		?		?
14	?	?	?
15		?		?

2. Determine the balances of the accounts affected by theadjusting entries, and prepare an adjusted trial balance.

Question not attempted.

Pitman Company

ADJUSTED TRIAL BALANCE

Score: 0/103

October 31, 2019

	ACCOUNTTITLE	DEBIT	CREDIT
1	Cash
2	Accounts Receivable
3	Prepaid Insurance
4	Supplies
5	Land
6	Building
7	Accumulated Depreciation-Building
8	Equipment
9	Accumulated Depreciation-Equipment
10	Accounts Payable
11	Unearned Rent
12	Salaries and Wages Payable
13	Jan Pitman, Capital
14	Jan Pitman, Drawing
15	Fees Earned
16	Rent Revenue
17	Salaries and Wages Expense
18	Utilities Expense
19	Advertising Expense
20	Repairs Expense
21	Depreciation Expense-Building
22	Depreciation Expense-Equipment
23	Insurance Expense
24	Supplies Expense
25	Miscellaneous Expense
26	Totals

azurekangaroo341

Alison and Chuck Renny began operations of their furniture repair shop (Lazy Sofa Furniture, Inc.) on January 1, 2014. The annual reporting period ends December 31. The trial balance on January 1, 2015, appears below (amounts are rounded to thousands of dollars to simplify).

Account Titles	Debit		Credit
Cash	$	5
Accounts Receivable		4
Supplies		3
Equipment		6
Accumulated Depreciation			$	0
Software		12
Accumulated Amortization				3
Accounts Payable				7
Notes Payable (long-term)				0
Salaries and Wages Payable				0
Interest Payable				0
Income Tax Payable				0
Unearned Revenue				0
Common Stock				15
Retained Earnings				5
Service Revenue				0
Supplies Expense		0
Depreciation Expense		0
Salaries and Wages Expense		0
Amortization Expense		0
Interest Expense		0
Income Tax Expense		0

Totals	$	30	$	30

Transactions during 2015 (summarized in thousands of dollars) follow:
1.	Borrowed $28 cash on July 1, 2015, signing a six-month note payable.
2.	Purchased equipment for $16 cash on July 1, 2015.
3.	Issued additional shares of common stock for $4.
4.	Earned revenues for 2015 in the amount of $71, including $8 on credit and $63 received in cash.
5.	Recognized salaries and wages expenses for 2015 of $42, paid in cash.
6.	Purchased additional equipment, $4 cash.
7.	Collected accounts receivable, $7.
8.	Paid accounts payable, $10.
9.	Purchased on account supplies for future use, $9.
10.	Received a $3 cash deposit on work to start January 15, 2016.

Data for adjusting journal entries:

11.	Amortization for 2015, $3.
12.	Supplies of $5 were counted on December 31, 2015.
13.	Depreciation for 2015, $1.
14.	Accrued interest on notes payable of $1.
15.	Wages earned since the December 24 payroll not yet paid, $2.
	Income tax for 2015 was $3 and will be paid in 2016 Prepare balance sheet. Prepare the closing journal entry. Post the closing entry and prepare a post-closing trial balance

pucecrocodile46

The ledger of Nash Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared. Debit Credit Prepaid Insurance $3,492 Supplies 2,593 Equipment 25,040 Accumulated Depreciation-Equipment $7,743 Notes Payable 20,290 Unearned Rent Revenue 4,080 Rent Revenue 61,870 Interest Expense â0â Salaries and Wages Expense 15,040 An analysis of the accounts shows the following. 1. The equipment depreciates $272 per month. 2. One-third of the unearned rent was earned as revenue during the quarter. 3. Interest of $520 is accrued on the notes payable. 4. Supplies on hand total $609. 5. Insurance expires at the rate of $291 per month. Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expenses. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Account Titles and Explanation Debit Credit

No.

Account Titles and Explanation

Debit

Credit

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HUMA 2640 Lecture Notes - Lecture 98: Accounts Payable, Financial Statement, Income Statement

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