Textbook Notes (368,214)
United States (205,988)
Accounting (115)
ACCT 1201 (75)
Chapter 4

ACCT Chapter 4 Condensed (Day 1 and 2).docx

10 Pages
81 Views
Unlock Document

Department
Accounting
Course
ACCT 1201
Professor
Ronen Gal-or
Semester
Spring

Description
Chapter 4 Condensed (Day 1 and 2) I. Completing the Recording Process 1. Analyze business transactions 2. Journalize the transaction 3. Post to ledger accounts (T-accounts) 4. Prepare a trial balance 5. Journalize and post adjusting entries 6. Prepare an adjusted trial balance 7. Prepare financial statements 8. Journalize and post closing entries 9. Prepare a post-closing trial balance II. Net Profit Margin I. Completing the Recording Process 1. Analyze business transactions 2. Journalize the transaction 3. Post to ledger accounts (T-accounts) 4. Prepare a trial balance A. Trial Balance - a list of all accounts with their debit or credit balances indicated in the appropriate column to provide a check on the equality of the debits and credits. The trial balance is basically just aggregating everything you put together in T-accounts. Jones Corporation Trial Balance June 30, 2007 Account Description Debit Credit 89,700 Supplies 5,000 Prepaid Insurance 1,000 Building 45,000 Land 25,000 Equipment 1,100 Accounts Payable 5,000 Notes Payable 60,000 Common Stock (Contributed Capital) 100,000 Retained Earnings Service Revenue 3,000 Advertising Expense 1,200 Totals 168,000 168,000 1 5. Journalize and post adjusting entries A. Deferred (Unearned) Revenues – Ex. 1. B. Accrued Revenues – Ex. 2. Interest Unearned Rent Revenue, Unearned Receivable, 3.Rent Receivable, Royalties Franchise Fees Receivable, Franchise Fee Receivable C. Deferred (Prepaid) Expense – Ex. 4. D. Accrued Expenses – Ex. 6. Wage Payable, Supplies, 5.Prepaid Rent, Prepaid 7.Interest Payable, 8.Income Tax Payable, Insurance, Prepaid Advertising Rent Payable E. Depreciation Expense – Ex. 9. Accumulated Depreciation A. Deferred (Unearned) Revenues – Ex. Unearned Rent Revenue, Unearned Franchise Fees Ex. 1 – Unearned Rent (similar to unearned franchise fees) Be careful of which company’s perspective you are booking the journals for. Inception (9/1/01) – Grubb Ellis receives $90,000 rent in advance for one year lease from Dillbean Corp. The entries for Grubb Ellis are: Dr. Cash 90,000 Cr. Unearned rent revenue 90,000 Adjusting Entry (12/31/01, four months) to recognize Rent Revenue Earned 90,000 * (4 ÷ 12) = 30,000 Dr. Unearned rent revenue 30,000 Cr. Rent revenue 30,000 Conclusion (8/31/02) – The rental period ends and Grubb Ellis recognizes the rest of the revenue Dr. Unearned revenue 60,000 Cr. Rent revenue 60,000 B. Accrued Revenues – Ex. Interest Receivable, Rent Receivable, Royalties Receivable, Franchise Fee Receivable Ex. 2 – Rent Receivable Inception (9/1/01) – Dillbean Corp signs a one-year rental agreement and agrees to pay Grubb Ellis rent of $90,000 at the end of the lease period (8/31/02). The entries for Grubb Ellis are: No transaction / no entry 2 Adjusting Entry (12/31/01) to recognize Rent Revenue Earned Dr. Rent receivable 30,000 Cr. Rent revenue 30,000 Conclusion (8/31/02) – The rental period ends and Grubb Ellis receives $90,000 Dr. Cash 90,000 Cr. Rent revenue 60,000 Cr. Rent receivable 30,000 Ex. 3 – Interest Receivable Inception (7/1/01) – MySpace Inc borrowed $60,000 and signed a note to Facebook Corp. The stated interest rate on the note is 10%. Both the principal and the interest are due on 6/31/02. The entries for Facebook are: Dr. Note receivable 60,000 Cr. Cash 60,000 Adjusting Entry (12/31/01) to recognize Interest Revenue Earned Interest Revenue = Principle * Interest Rate * Time Period 3,000 = 60,000 * 10% * 6/12 (6 months/12 months) Dr. Interest receivable 3,000 Cr. Interest revenue 3,000 Conclusion (6/31/02) – MySpace pays the interest and principle on the loan. Facebook’s entries are: Dr. Cash 60,000 Cr. Notes receivable 60,000 Dr. Cash 6,000 Cr. Interest revenue 3,000 Cr. Interest receivable 3,000 OR combine Cash debits (66,000) and put the three credit entries below it. C. Deferred (Prepaid) Expense – Ex. Supplies, Prepaid Rent, Prepaid Insurance, Prepaid Advertising Ex. 4 – Supplies Speaner Corp: 1/1/01 Supplies – $2,500 Beginning Balance 9/1/01 Purchase – $5,000 of additional Supplies Dr. Supplies 5,000 Cr. Cash 5,000 3 12/31/01 – Supplies Counted – $1,700 remaining Adjusting Entry (12/31/01) to recognize supplies used (ALWAYS MAKE T-ACCOUNT!) Supplies Beg Bal 2,500 Purchase 5,000 plug 5,800 End Bal 1,700 Dr. Supplies expense 5,800 Cr. Supplies 5,800 Ex. 5 – Prepaid Rent Inception (9/1/01) – Grubb Ellis receives $90,000 rent in advance for one year lease from Dillbean Corp. The entries for Dillbean are: Dr. Prepaid rent expense 90,000 Cr. Cash 90,000 Adjusting Entry (12/31/01) to recognize Rent Expense Incurred Dr. Rent expense 30,000 Cr. Prepaid rent expense 30,000 Conclusion (8/31/02) – The rental period ends and Dillbean incurs the rest of the rent expense Dr. Rent expense 60,000 Cr. Prepaid rent expense 60,000 4 D. Accrued Expenses – Ex. Wage Payable, Interest Payable, Income Tax Payable, Rent Payable Ex. 6 – Wage Payable Hired (11/10/01) – Beatstick Corp hires Hugh Jamstein and agrees to pay him a $12,000 salary every month on the 10 starting on December 10 2001. 11/10/01 No transaction 12/10/01 – First Paycheck Dr. Salary expense 12,000 Cr. Cash 12,000 Adjusting Entry (12/30/01) to recognize Wage Expense Incurred (12,000 * 2/3) Dr. Salary expense 8,000 Cr. Salary payable 8,000 1/10/02 – Second Paycheck Dr. Salary payable `8,000 Dr. Salary expense 4,000 Cr. Cash 12,000 Ex. 7 – Interest Payable Inception (7/1/01) – MySpace Inc borrowed $60,000 and signed a note to Facebook Corp. The stated interest rate on the note is 10%. Both the principal and the interest are due on 6/31/02. The entries for MySpace are: Dr. Cash 60,000 Cr. Note payable 60,000 Adjusting Entry (12/31/01) to recognize Interest Expense Incurred Interest Expense = Dr. Interest expense 3,000 Cr. Interest payable 3,00
More Less

Related notes for ACCT 1201

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit