ACCT 200 Lecture 11: ACT-200,University of Arizona, Lecture Notes(p11)

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ivorysea-lion839

30 Aug 2018

School

University of Arizona

Department

Accounting

Course

ACCT 200

Professor

All

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Document Summary

Revenues for services performed but not yet received in cash or recorded. Adjusting entries relate inn revenue recorded before cash receipt. For accrued revenues: an adjusting entry 1. shows the receivable exists and 2. records the revenues for services performed. Accrued expenses expenses incurred but not yet paid in cash or recorded. For accrued expenses an adjusting entry 1. records the obligations and 2. recognizes the expenses. When you get interest rates, they are always sated in annual terms. If we don"t make these adjustments the records are incorrect. Temporary accounts need to be zeroed out when closing the books. Wet lose revenues and expenses to income summer in order to close them into retained earnings. The purpose of the post-closing trial balance is to prove the equality of the permanent account balances that the company carries forward into the next accounting period. All temporary accounts will have zero balances. Cash is the most important asset on the balance sheet.

Related Questions

NEED ANSWERS ASAP

Question 23

If a resource has been consumed but a bill hasnot been received at the end of the accountingperiod, then

		an expense should be recorded when the bill is received.
		an expense should be recorded when the cash is paid out.
		an adjusting entry should be made recognizing the expense.
		it is optional whether to record the expense before the bill isreceived.

3 points

Question 24

Prepaid expenses are

		paid and recorded in an asset account before they are used orconsumed.
		paid and recorded in an asset account after they are used orconsumed.
		incurred but not yet paid or recorded.
		incurred and already paid or recorded.

3 points

Question 25

If a business has received cash in advance of services performedand credits a liability account, the adjusting entry needed afterthe services are performed will be

		debit Unearned Service Revenue and credit Cash.
		debit Unearned Service Revenue and credit Service Revenue.
		debit Unearned Service Revenue and credit Prepaid Expense.
		debit Unearned Service Revenue and credit AccountsReceivable.

3 points

Question 26

The preparation of adjusting entries is

		straight forward because the accounts that need adjustment willbe out of balance.
		often an involved process requiring the skills of aprofessional.
		only required for accounts that do not have a normalbalance.
		optional when financial statements are prepared.

3 points

Question 27

On January 1 of the current year, Doolittle Company purchasedfurniture for $7,560. The company expects to use the furniture for3 years. The asset has no salvage value. The book value of thefurniture at December 31of this year is

		$0.
		$2,520.
		$5,040.
		$7,560.

3 points

Question 28

Husker Du Supplies Inc. purchased a 12-month insurance policy onMarch 1 of the current year for $1,800. At March 31, the adjustingjournal entry to record expiration of this asset will include a

		debit to Prepaid Insurance and a credit to Cash for $1,800.
		debit to Prepaid Insurance and a credit to Insurance Expense for$200.
		debit to Insurance Expense and a credit to Prepaid Insurance for$150.
		debit to Insurance Expense and a credit to Cash for $150.

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

salmonbee133

Terrific Temps fills temporary employment positions for localbusinesses. Some businesses pay in advance for services; others arebilled after services have been performed. Advanced payments arecredited to an account entitled Unearned Fees. Adjusting entriesare performed on a monthly basis. An unadjusted trial balance datedDecember 31, 2015, follows. (Bear in mind that adjusting entrieshave 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 insurance900 Prepaid rent 3,000 Office supplies 600 Equipment 60,000Accumulated depreciation: equipment $ 29,500 Accounts payable 4,180Notes payable 12,000 Interest payable 320 Unearned fees 6,000Income taxes payable 4,000 Unearned revenue 20,000 Retainedearnings 49,000 Capital stock 25,000 Dividends 3,000 Fees earned75,000 Travel expense 5,000 Insurance expense 2,980 Rent expense9,900 Office supplies expense 780 Utilities expense 4,800Depreciation expense: equipment 5,500 Salaries expense 30,000Interest expense 320 Income taxes expense 12,000 $ 225,000 $225,000 Other Data 1. Accrued but unrecorded fees earned as ofDecember 31, 2015, amount to $1,500. 2. Records show that $2,500 ofcash receipts originally recorded as unearned fees had been earnedas of December 31. 3. The company purchased a six-month insurancepolicy on September 1, 2015, for $1,800. 4. On December 1, 2015,the company paid its rent through February 28, 2016. 5. Officesupplies on hand at December 31 amount to $400. 6. All equipmentwas purchased when the business first formed. The estimated life ofthe equipment at that time was 10 years (or 120 months). 7. OnAugust 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. Accruedbut 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 2016. Instructions a. Foreach of the numbered paragraphs, prepare the necessary adjustingentry. (If no entry is required for a transaction/event, select "Nojournal entry required" in the first account field.

part 2.b. Determine that amount at which eachof the following accounts will be reported in the companyâs 2015income 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.income taxes expense

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ACCT 200 Lecture 11: ACT-200,University of Arizona, Lecture Notes(p11)

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