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ACC241_PracticeSet_OL-1 HANDOUT 4 ? 1 HANDOUT 4 ? 2 HANDOUT 4 ? 3 HANDOUT 4 ? 4

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Question;Prepare the required adjusting journal entry for each situation as of December 31, 2010. See thelast page for the unadjusted account balances shown in T-accounts.(a) Suppose Deana?s had received a $1,800 shipment of supplies in September 2010. Whencounting the supplies on December 31, 2010, Deana?s found only $800 worth of supplies onhand.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? Equity(b) Suppose Deana?s had paid $12,000 for six months? rent on November 1, 2010. As ofDecember, 31, 2010, two months? (November & December) prepaid rent has expired.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? Equity(c) Suppose Deana?s had paid $6,000 for one year?s insurance on June 1, 2010.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? EquityHANDOUT 4 ? 1, continued(d) The company had acquired Property, Plant & Equipment costing $40,000 on January 1, 2010.Suppose that the depreciation on this Equipment was calculated to be $2,000 for 2010.Debit and credit the accounts affected.Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? Equity(e) On December 1, 2010, the company had sold $500 in gift certificates for decorating servicesto a customer. On December 31, 2010, the accountant received an envelope containing $400worth of redeemed gift certificates, not yet recorded in the company?s books.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? Equity(f) On June 30, 2010, the company invested $20,000 in a certificate of deposit that will yield12% interest at the end of one year.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? EquityHANDOUT 4 ? 1, continued(g) The company borrowed a note payable from the bank for $30,000 on January 1, 2010, duewith all interest on June 30, 2011. The note payable requires 10% interest.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? Equity(h) The company calculated its income taxes as $26,110 for the year ended December 31, 2010.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabiliti+esStockholders? Equity(i) On December 15, 2010, the company declared a $750 dividend, payable January 15, 2011.Debit and credit the accounts affected.Dec. 312010Ensure the equation still balances and debits = credits.Assets=Liabilities+Stockholders? EquityPost the adjusting entries above to the T-accounts on the following page.HANDOUT 4 ? 1, continuedAssetsLiabilitiesStockholders? EquityUnadj.Unadj.+ Cash ?43,450- Accounts Payable +250 Unadj.+ Supplies ?1,800- Dividend Payable +0 Unadj.(a)+ Accounts Receivable ?Unadj 4,000.Unadj.+ Prepaid Rent ?12,000(b)+ Prepaid Insurance ?Unadj 6,000.(c)+ Certificate of Deposit ?Unadj 20,00.0- Unearned Revenue +500 Unadj.- Notes Payable +30,00 Unadj0.- Interest Payable +0 Unadj.+ Contributed Capital ?10,00 Unadj.0- Retained Earnings +0 Unadj.+ Dividends Declared ?Unadj0.- Decorating Revenue +120,000 Unadj.+ Investment Income ?+ Wage Expense ?Unadj 32,00.0+ Utilities Expense ?Unadj 1,000.- Income Tax Payable +0 Unadj.+ Telephone Expense ?Unadj500.+ Supplies Expense ?+ Interest Receivable ?Unadj0.+ Rent Expense ?+ Insurance Expense ?+ Property, Plant &Equipment ?Unadj 40,00.0+ Depreciation Expense ?+ Interest Expense ?- Accumulated Depr. +0 Unadj.+ Income Tax Expense ?HANDOUT 4 ? 2Deana?s DecoratorsAdjusted Trial BalanceDecember 31, 2010DebitCreditCashSuppliesAccounts ReceivablePrepaid RentPrepaid InsuranceCertificate of DepositInterest ReceivableProperty, Plant & EquipmentAccumulated DepreciationAccounts PayableDividend PayableUnearned RevenueNotes PayableInterest PayableIncome Tax PayableContributed CapitalRetained EarningsDecorating RevenueInvestment IncomeWage ExpenseUtilities ExpenseTelephone ExpenseSupplies ExpenseRent ExpenseInsurance ExpenseDepreciation ExpenseInterest ExpenseIncome Tax ExpenseTotalsHANDOUT 4 ? 3FINANCIAL STATEMENTSDeana?s DecoratorsIncome StatementFor the year ended December 31, 2010Deana?s DecoratorsStatement of Retained EarningsFor the year ended December 31, 2010HANDOUT 4 ? 3, continuedDeana?s DecoratorsBalance SheetDecember 31, 2010AssetsLiabilitiesStockholders? EquityHANDOUT 4 ? 4CLOSING ENTRIES, POSTING TO T-ACCOUNTS,PREPARATION OF POST-CLOSING TRIAL BALANCEFor Deana?s Decorators, prepare the required closing entries. Post the entries to the Taccounts shown on the next page. Then, prepare a post-closing trial balance.DateAccountsDebitCreditHANDOUT 4 ? 4, continuedAssetsLiabilitiesStockholders? EquityUnadj.+ Cash ?43,450- Accounts Payable +250 Unadj.250Adj.43,450Unadj.+ Supplies ?1,800Adj.- Dividend Payable +0 Unadj.750(a)800+ Accounts Receivable ?Unadj.4,000(e)Adj.4,000Adj.+ Prepaid Rent ?Unadj. 12,0004,000Adj.(b)(i)750Adj.750Adj.- Revenue +120,000- Unearned Revenue +500 Unadj.400400120,400(e)Adj.+ Investment Income ?1,200 (f)Adj.- Interest Payable +0 Unadj.3,000Adj.Unadj.+ Wage Expense ?32,000(g)3,000(c)Unadj.10030,0002,500+ Utilities Expense ?Unadj.1,000- Income Tax Payable +0 Unadj.+ Certificate of Deposit ?Unadj. 20,00026,110(h)26,110Adj.0 Unadj.- Notes Payable +30,000 Unadj.+ Prepaid Insurance ?Unadj. 6,000Adj.(i)8,0003,500- Retained Earnings +Adj.7501,000+ Contributed Capital ?10,0 Unad00 j.+ Telephone Expense ?Unadj.500Adj.20,000(f)1,200Adj.(d)(a)+ Supplies Expense ?1,000(b)Stockholders? Equity+ Interest Receivable ?Unadj.0+ Rent Expense ?4,000+ Depreciation Expense ?2,0001,200+ Property, Plant & Equipment ?+ Interest Expense ?Unadj.40,000Adj.40,000- Accumulated Depr. +0 Unadj.2,000 (d)2,000(g)(h)3,000+ Income Tax Expense ?26,110(c)+ Insurance Expense ?3,500HANDOUT 4 ? 4, continuedAccountDeana?s DecoratorsPost-Closing Trial BalanceDecember 31, 2010DebitCreditCashSuppliesAccounts ReceivablePrepaid RentPrepaid InsuranceCertificate of DepositInterest ReceivableProperty, Plant & EquipmentPP&E ? Accumulated DepreciationAccounts PayableDividend PayableUnearned RevenueNotes PayableInterest PayableIncome Tax PayableContributed CapitalRetained EarningsRevenueInvestment IncomeWage ExpenseUtilities ExpenseTelephone ExpenseSupplies ExpenseRent ExpenseInsurance ExpenseDepreciation ExpenseInterest ExpenseIncome Tax ExpenseTotals

 

Paper#43285 | Written in 18-Jul-2015

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