Textbook Notes (362,734)
United States (204,197)
Accounting (115)
ACCT 1201 (75)
Chapter 4


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Northeastern University
ACCT 1201
Ronen Gal-or

Chapter 4 Exercises 1. Adjusting entries – You must complete Chapter 3 Exercises before completing this Exercise. Caddyshack Miniature Golf and Driving Range, Inc., has just completed its first month of operations and it needs to prepare some basic financial statements in order to apply for a bank loan. You have been asked to make the necessary adjusting journal entries prior to the statements’ preparation. As of April 30, the following information is provided: • A physical count of the total supplies, including clubs, balls, etc., showed a remaining total cost of $2,900 remaining. • The advertisement in the local paper ran for the month of April. • The new insurance policy was finalized. • By April 30, a total of 75 coupons had been redeemed by customers. 2. Adjusting entries On June30.2007, the end of the current fiscal year, the following information was available for AJE Enterprise in order to prepare adjusting entries: • Among the liabilities of the company is a mortgage note payable in the amount of $240,000. At June 30, the accrued interest on this mortgage amounted to $12,000. • On Friday, July 2, the company, which is on a five (5)-day workweek and pays employees weekly, will pay its regular salaried employees a total of $19,200. • On June 29, the company completed negotiations and signed a contract to provide services to a new client at an annual rate of $3,600. • The Prepaid Insurance account shows a balance of $720 represents the premium for a one (1)-year policy purchased on April 1, 2007. • A total of $12,000 depreciation has accumulated for the fiscal year. • On June 1, the completed negotiations with another client and accepted a payment of $21,000, representing one
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