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Accounting Principles I - Chapters 3 & 4 - Exam - Part II




Question;Accounting Principles I - Online Chapters 3 & 4 -;Exam - Part II;NAME:???;PART A (24 Points);In the journal for McGill Company provided below, record the appropriate;adjusting entries as of December 31. Please note;that McGill Company has not prepared any adjusting entries for the;current year prior to December 31.;a. The Store Supplies account showed a beginning balance of;$700 and purchases of $500. Unused store supplies at the end of the year;were counted and totaled $300.;b. On December 1, the company paid three months;rent in advance, debiting Prepaid Rent for $1,800.;c. Equipment purchased January 1of the;current year for $26,000 was estimated to have a useful life of 5 years with;$1,000 salvage value.;d. Wages are paid each Friday for a 5-day week. The;salary is set at a fixed rate of $800 per day, and the accounting period ended;on Wednesday.;e. On November 1, the company accepted a;$10,000, 12%, 9-monthNote Receivable. An adjusting entry should be made to accrue the interest on this;note.;f. The balance in Unearned Commissions Revenue at December 31;is $1,400. This represents a customer deposit for which one-half has been;earned as of December 31.;McGILL COMPANY GENERAL JOURNAL;DATE;ACCOUNT TITLES;DR;CR;PART B (30 Points);Below is an Adjusted Trial Balance for Green Company for the year;ended December 31. In the space provided on the next two pages;Required;a. Record the appropriate closing entries. (Third line explanations;are not necessary.);b. Prepare a Post-Closing Trial Balance.;GREEN COMPANY;Adjusted Trial Balance;December 31, 20xx;DEBIT;CREDIT;Cash;$ 1,150;Account;Receivable;3,600;Office;Supplies;1,500;Office;Equipment;10,000;Accumulated;Depreciation, Office Equipment;$ 4,000;Accounts;Payable;700;C.R.;Green, Capital;8,000;C.R.;Green, Drawing;1,200;Commissions;Revenue;7,100;Interest;Revenue;200;Depreciation;Expense;200;Salary;Expense;2,200;Utility Expense;150;TOTALS;$ 20,000;$ 20,000;GREEN COMPANY GENERAL JOURNAL;DATE;ACCOUNT TITLE;DR;CR;GREEN COMPANY;Post-Closing Trial Balance;December 31, 20xx;DEBIT;CREDIT;PART C (16 Points);ESSAY QUESTIONS;Required: For EACH of the two questions below, write at least;one full paragraph in response to the question asked;1. Explain why adjusting entries should be made at the end of an;accounting period. There are two categories of adjusting entries, Accrual;Adjustments and Deferral Adjustments. Explain each category fully and;give at least one example of each.;2. The long-term liability section of Beta Company's Balance Sheet;includes the following accounts;Notes;Payable (due in 5 years);$100,000;Mortgage;Payable;250,000;Salaries;Payable;75,000;Accumulated;Depreciation;125,000;Total long-term liabilities;$550,000;Beta Company is an established company and does not experience any;financial difficulties or have any cash flow problems. Identify at;least two items in the long-term liability section that are;questionable and explain where the placement on the balance sheet would be more;appropriate and why.


Paper#37892 | Written in 18-Jul-2015

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