ACCT 2001 Study Guide - Quiz Guide: Net Income, Income Statement

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ACCT 2001 Full Course Notes

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Class 6 review exercise (answer these questions and check answers as soon as possible after each class) Revenue : prepare the general journal entry required to adjust the accounts on december 31, 2011, prepare t-accounts to demonstrate the correctness of your adjusting entry. Example #1 on december 1, 2011 casio company received ,000 for services to be earned over the next six months. A real account ( unearned revenue) was credited. The company adjusts and closes its accounting records on december 31: prepare the general journal entry required on december 1, 2011. 2,000: prepare t-accounts to demonstrate the correctness of your adjusting entry. Example #2 on december 1, 2011 casio company received ,000 for services to be earned over the next six months. The company adjusts and closes its accounting records on. December 31: prepare the general journal entry required on december 1, 2011. Revenue ,000: prepare the general journal entry required to adjust the accounts on december 31, 2011.

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HW 9 â 1

PAYROLL ENTRIES

J&W Buffet Co. employees earned $350,000 in the week endedDecember 17, 2010. Of this, $26,775 was deducted from employeesâpay for FICA and $62,000 was deducted for income taxes.

Prepare the journal entry to record the employeesâ portion ofpayroll for December 17, 2010.

Prepare the journal entry to record the employerâs share of FICApayroll taxes for December 17, 2010.

HW 9 â 2

NOTES PAYABLE

Mumford Co. borrowed a $100,000 note payable on June 1, 2010,with 6% interest. The note is due on May 31, 2011.

Prepare the journal entry to record the issuance of the note andreceipt of cash on June 1, 2010.

Prepare the adjusting journal entry to record the interest owedat the end of the accounting period on December 31, 2010.

Prepare the journal entries to record the interest and principalpayments to the lender on May 31, 2011.

HW 9 â 3

UNEARNED REVENUE

On January 1, 2009, Charlie Rangel paid $2,000 for a twoâyearmembership to the Beam Gym.

Prepare the journal entry to record the receipt of cash onJanuary 1, 2009.

By December 31, 2009, one half of Rangelâs membership expired.Prepare the required adjusting journal entry on that date.

By December 31, 2010, the remainder of Rangelâs membershipexpired. Prepare the required adjusting journal entry on thatdate.

Post the entries above to the Unearned Revenue account:

Unearned Revenue

carminebeaver658

PAYROLL ENTRIES

J&W Buffet Co. employees earned $350,000 in the week endedDecember 17, 2010. Of this, $26,775 was deducted from employeesâpay for FICA and $62,000 was deducted for income taxes.

Prepare the journal entry to record the employeesâ portion ofpayroll for December 17, 2010.

Prepare the journal entry to record the employerâs share of FICApayroll taxes for December 17, 2010.

HW 9 â 2

NOTES PAYABLE

Mumford Co. borrowed a $100,000 note payable on June 1, 2010,with 6% interest. The note is due on May 31, 2011.

Prepare the journal entry to record the issuance of the note andreceipt of cash on June 1, 2010.

Prepare the adjusting journal entry to record the interest owedat the end of the accounting period on December 31, 2010.

Prepare the journal entries to record the interest and principalpayments to the lender on May 31, 2011.

HW 9 â 3

UNEARNED REVENUE

On January 1, 2009, Charlie Rangel paid $2,000 for a twoâyearmembership to the Beam Gym.

Prepare the journal entry to record the receipt of cash onJanuary 1, 2009.

By December 31, 2009, one half of Rangelâs membership expired.Prepare the required adjusting journal entry on that date.

By December 31, 2010, the remainder of Rangelâs membershipexpired. Prepare the required adjusting journal entry on thatdate.

Post the entries above to the Unearned Revenue account:

Unearned Revenue

HW 9 â 4

ISSUING BONDS

Issuance of $800,000, 5-year, 8% payable annually (market rate12%) for cash of $684,627 on 1/1/07

Were these bonds issued at a discount or at a premium? Why?

Prepare the journal entry to record the issuance (sale) of thebonds:

Complete the following interest schedule (assuming straight-lineamortization):

Date	Cash Payment of Interest	Interest Expense	Amortization of Discount	Carrying Value (Net Liability)
1/1/2007	None	None	None
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011

Prepare the journal entry to record the first payment ofinterest on 12/31/2007:

HW 9 â 5

ISSUING BONDS

Issuance of $1,200,000, 5-year, 10% payable annually (marketrate 8%) for cash of $1,295,844 on 1/1/07

Were these bonds issued at a discount or at a premium? Why?

Prepare the journal entry to record the issuance (sale) of thebonds:

Complete the following interest schedule (assuming straight-lineamortization):

Date	Cash Payment of Interest	Interest Expense	Amortization of Premium	Carrying Value (Net Liability)
1/1/2007	None	None	None
12/31/2007
12/31/2008
12/31/2009
12/31/2010
12/31/2011

Prepare the journal entry to record the first payment ofinterest on 12/31/2007:

whitewhale375

M4-6 Recording Adjusting Journal Entries [LO 4-2] For each of the following transactions for the Sky Blue Corporation, prepare the adjusting journal entries required on October 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

a. Collected $3,300 rent for the period October 1 to December 31, which was credited to Unearned Revenue on October 1.

b. Paid $1,920 for a two-year insurance premium on October 1 and debited Prepaid Insurance for that amount.

c. Used a machine purchased on October 1 for $51,600. The company estimates annual depreciation of $5,160.

bluecamel606

ACCT 2001 Study Guide - Quiz Guide: Net Income, Income Statement

ACCT 2001 Full Course Notes

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