1. Prepare entries to record the following transactions:
(a) a $5,000 cash investment made by the owner of a business.
(b) $1,700 in revenue earned on account.
(c) $2,500 of cash received in advance.
(d) $750 of advertising paid in advance.
(e) a $1,950 withdrawal
(f) the collection of $650 in cash on account.
(g) $275 of supplies purchased on account.
(h) $420 of utilities expense owed.
(i) a $215 cash payment made on account.
(j) $700 of revenue earned in cash.
2. Before any adjustments have been recorded, unearned rent has a normal balance of $57. If $18 of rent remains unearned at year end, prepare the the adjusting entry to record rental income earned.
3. On October 1 of the current year, a business prepaid $12 of property tax, in advance, for the next 12 months. As of December 31, it owed but had not yet recorded $6 in wages due in January of the following year. Prepare any adjusting and closing entries you think are needed at year end.
4. What would the normal balance be of a liability account a post closing trial balance? A revenue account? Drawing? Explain.
Click here for the solution: Prepare entries to record the following transactions
Showing posts with label Entries. Show all posts
Showing posts with label Entries. Show all posts
Friday, September 25, 2015
Tuesday, September 15, 2015
Record the necessary journal entries from the following bank reconciliation information for July 31, 2011
10. Record the necessary journal entries from the following bank reconciliation information for July 31, 2011:
Bank Balance, July 31, 2011 $36,739
Checkbook Balance, July 31, 2011 36,444
Bank collection of note receivable 1,200 + 165 interest
Bank service charge 35
Deposits in transit 2,400
Outstanding checks 1,245
NSF check from customer 330
Correction of book error (check #456 written for $160, recorded at $610)—gas expense
Click here for the solution: Record the necessary journal entries from the following bank reconciliation information for July 31, 2011
Bank Balance, July 31, 2011 $36,739
Checkbook Balance, July 31, 2011 36,444
Bank collection of note receivable 1,200 + 165 interest
Bank service charge 35
Deposits in transit 2,400
Outstanding checks 1,245
NSF check from customer 330
Correction of book error (check #456 written for $160, recorded at $610)—gas expense
Click here for the solution: Record the necessary journal entries from the following bank reconciliation information for July 31, 2011
Tuesday, August 18, 2015
Prepare journal entries to record the following transactions related to long-term bonds of Quirk Co
Prepare journal entries to record the following transactions related to long-term bonds of Quirk Co.
(a) On April 1, 2009, Quirk issued $500,000, 9% bonds for $537,868 including accrued interest. Interest is payable annually on January 1, and the bonds mature on January 1, 2019.
(b) On July 1, 2011 Quirk retired $150,000 of the bonds at 102 plus accrued interest. Quirk uses straight-line amortization.
Click here for the solution: Prepare journal entries to record the following transactions related to long-term bonds of Quirk Co
(a) On April 1, 2009, Quirk issued $500,000, 9% bonds for $537,868 including accrued interest. Interest is payable annually on January 1, and the bonds mature on January 1, 2019.
(b) On July 1, 2011 Quirk retired $150,000 of the bonds at 102 plus accrued interest. Quirk uses straight-line amortization.
Click here for the solution: Prepare journal entries to record the following transactions related to long-term bonds of Quirk Co
Saturday, August 1, 2015
The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared
E3-5 (Adjusting Entries) The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared.
Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation—Equipment $ 8,400
Notes Payable 20,000
Unearned Rent Revenue 6,300
Rent Revenue 60,000
Interest Expense –0–
Wage Expense 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $250 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $650.
5. Insurance expires at the rate of $300 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expense; Interest Payable; and Supplies Expense. (Omit explanations.)
Click here for the solution: The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared
Debit Credit
Prepaid Insurance $ 3,600
Supplies 2,800
Equipment 25,000
Accumulated Depreciation—Equipment $ 8,400
Notes Payable 20,000
Unearned Rent Revenue 6,300
Rent Revenue 60,000
Interest Expense –0–
Wage Expense 14,000
An analysis of the accounts shows the following.
1. The equipment depreciates $250 per month.
2. One-third of the unearned rent was earned during the quarter.
3. Interest of $500 is accrued on the notes payable.
4. Supplies on hand total $650.
5. Insurance expires at the rate of $300 per month.
Instructions
Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense; Insurance Expense; Interest Payable; and Supplies Expense. (Omit explanations.)
Click here for the solution: The ledger of Chopin Rental Agency on March 31 of the current year includes the following selected accounts before adjusting entries have been prepared
Tuesday, July 7, 2015
The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375
PR 8-3A Bank reconciliation and entries
The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375. The bank statement indicated a balance of $10,760 on June 30, 2012. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $3,900.
b. A deposit of $4,000, representing receipts of June 30, had been made too late to appear on the bank statement.
c. The bank had collected $2,100 on a note left for collection. The face of the note was $2,000.
d. A check for $550 returned with the statement had been incorrectly recorded by Online Medical Co. as $500. The check was for the payment of an obligation to Hirsch Co. for the purchase on account.
e. A check drawn for $60 had been erroneously charged by the bank as $600.
f. Bank service charges for June amounted to $25.
Instructions
1. Prepare a bank reconciliation
2. Journalize the necessary entries. The accounts have not been closed.
3. If a balance sheet were prepared for Online Medical Co. on June 30, 2012, what amount should be reported as cash?
Click here for the solution: The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375
The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375. The bank statement indicated a balance of $10,760 on June 30, 2012. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $3,900.
b. A deposit of $4,000, representing receipts of June 30, had been made too late to appear on the bank statement.
c. The bank had collected $2,100 on a note left for collection. The face of the note was $2,000.
d. A check for $550 returned with the statement had been incorrectly recorded by Online Medical Co. as $500. The check was for the payment of an obligation to Hirsch Co. for the purchase on account.
e. A check drawn for $60 had been erroneously charged by the bank as $600.
f. Bank service charges for June amounted to $25.
Instructions
1. Prepare a bank reconciliation
2. Journalize the necessary entries. The accounts have not been closed.
3. If a balance sheet were prepared for Online Medical Co. on June 30, 2012, what amount should be reported as cash?
Click here for the solution: The cash account for Online Medical Co. at June 30, 2012, indicated a balance of $9,375
(Bank reconciliation and entries) Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours
PR 8-5A Bank reconciliation and entries
Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of June 30 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.
AND SO ON
Instructions
1. Prepare a bank reconciliation as of June 30. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable.
2. Journalize the necessary entries. The accounts have not been closed.
3. What is the amount of Cash that should appear on the balance sheet as of June 30?
4. Assume that a canceled check for $270 has been incorrectly recorded by the bank as $720. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.
Check: 1. Adjusted Balance: $13,900.50
Click here for the solution: (Bank reconciliation and entries) Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours
Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of June 30 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account.
AND SO ON
Instructions
1. Prepare a bank reconciliation as of June 30. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales. All checks are written to satisfy accounts payable.
2. Journalize the necessary entries. The accounts have not been closed.
3. What is the amount of Cash that should appear on the balance sheet as of June 30?
4. Assume that a canceled check for $270 has been incorrectly recorded by the bank as $720. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.
Check: 1. Adjusted Balance: $13,900.50
Click here for the solution: (Bank reconciliation and entries) Oneida Furniture Company deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours
Monday, July 6, 2015
Transaction data and journal entries for Pickert Real Estate Agency are presented in E3-7 and E3-8
E3-9 Transaction data and journal entries for Pickert Real Estate Agency are presented in E3-7 and E3-8.
Hint: Post journal entries and prepare a trial balance.
Instructions
(a) Post the transactions to T accounts
(b) Prepare a trial balance at October 31, 2010
Click here for the solution: Transaction data and journal entries for Pickert Real Estate Agency are presented in E3-7 and E3-8
Hint: Post journal entries and prepare a trial balance.
Instructions
(a) Post the transactions to T accounts
(b) Prepare a trial balance at October 31, 2010
Click here for the solution: Transaction data and journal entries for Pickert Real Estate Agency are presented in E3-7 and E3-8
Wednesday, June 24, 2015
(Lessee Entries, Capital lease with Unguaranteed Residual Value) On January 1, 2011, Adams Corporation signed a 5-year non-cancelable lease for a machine
Exercise 21-1 (E21-1) (Lessee Entries, Capital lease with Unguaranteed
Residual Value) On January 1, 2011, Adams Corporation signed a 5-year
non-cancelable lease for a machine. The terms of the lease called for
Adams to make annual payments of $ 9,968 at the beginning of each year,
starting 01/01/11. The machine has an estimated useful life of six years
and a $ 5,000 unguaranteed residual value. The machine reverts back to
the lessor at the end of the lease term. Adams uses the straight-line
method of depreciation for all of its plant assets. Adam's incremental
borrowing rate is 10%, and the Lessor's implicit rate is unknown.
Instructions:
(A.) What type of lease is this? Explain
(B.) Compute the present value of the minimum lease payments.
(C.) Prepare all necessary journal entries for Adams for this lease through January 1, 2012
Click here for the solution: (Lessee Entries, Capital lease with Unguaranteed Residual Value) On January 1, 2011, Adams Corporation signed a 5-year non-cancelable lease for a machine
Instructions:
(A.) What type of lease is this? Explain
(B.) Compute the present value of the minimum lease payments.
(C.) Prepare all necessary journal entries for Adams for this lease through January 1, 2012
Click here for the solution: (Lessee Entries, Capital lease with Unguaranteed Residual Value) On January 1, 2011, Adams Corporation signed a 5-year non-cancelable lease for a machine
Brecker Company lease an automobile with a fair value of $10,906 from Emporia Motors, Inc, on the following terms
Exercise 21-2 (E21-2) (Lessee Computation and Entries, Capital Lease
with Guaranteed Residual Value) Brecker Company lease an automobile with
a fair value of $10,906 from Emporia Motors, Inc, on the following
terms:
1. Noncancelable term of 50 months
2. Rental of $250 per month (at end of each month). (The present value at 1% per month is $9,800.)
3. Estimated residual value after 50 months is $ 1,180.(the present value at 1% per month is $715.) Brecker Company guarantees the residual value of $ 1,180.
4. Estimated economic life of the automobile is 60 months
5. Brecker Company's incremental borrowing rate is 12% a year (1% a month). Emporia's implicit rate is unknown.
Instructions:
(a.) What is the nature of the lease to Brecker Company?
(b.) What is the present value of the minimum lease payments?
(c.) Record the lease on Brecker Company's books a the date of inception.
(d.) Record the first month's depreciation on Brecker Company's books (assume straight lined)
(e.) Record the first month's lease payment.
Click here for the solution: Brecker Company lease an automobile with a fair value of $10,906 from Emporia Motors, Inc, on the following terms
1. Noncancelable term of 50 months
2. Rental of $250 per month (at end of each month). (The present value at 1% per month is $9,800.)
3. Estimated residual value after 50 months is $ 1,180.(the present value at 1% per month is $715.) Brecker Company guarantees the residual value of $ 1,180.
4. Estimated economic life of the automobile is 60 months
5. Brecker Company's incremental borrowing rate is 12% a year (1% a month). Emporia's implicit rate is unknown.
Instructions:
(a.) What is the nature of the lease to Brecker Company?
(b.) What is the present value of the minimum lease payments?
(c.) Record the lease on Brecker Company's books a the date of inception.
(d.) Record the first month's depreciation on Brecker Company's books (assume straight lined)
(e.) Record the first month's lease payment.
Click here for the solution: Brecker Company lease an automobile with a fair value of $10,906 from Emporia Motors, Inc, on the following terms
(Lessee-Lessor Entries, Sales-Type Lease) Glaus Leasing Company agrees to lease machinery to Jensen Corporation on January 1, 2010
Problem 21-1 (P21-1) (Lessee-Lessor Entries, Sales-Type Lease) Glaus
Leasing Company agrees to lease machinery to Jensen Corporation on
January 1, 2010. The following information relates to the lease
agreement.
1 The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years
2 The cost of the machinery is $ 525,000, and the fair value of the asset on January 1, 2010, is $700,000.
3 At the end of the lease term the asset reverts to the lessor. At the end of the lease term the asset has guaranteed residual value of $ 100,000. Jensen depreciates all if its equipment on a straight-line basis
4 The lease agreement requires equal annual rental payments, beginning on January 1, 2010.
5 The collectability of the lease payments is reasonable predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor.
6 Glaus desires a 10% rate of return on its investments. Jensen's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown.
Instructions:
(Assume the accounting period ends on December 31)
(a.) Discuss the nature of this lease for both the lessee and the lessor.
(b.) Calculate the amount of the annual rental payment required.
(c.) Compute the present value of the minimum lease payments.
(d.) Prepare the journal entries Jensen would make in 2010 and 2011 related to the lease arrangements.
(e.) Prepare the journal entries Glaus would make in 2010 and 2011.
Click here for the solution: (Lessee-Lessor Entries, Sales-Type Lease) Glaus Leasing Company agrees to lease machinery to Jensen Corporation on January 1, 2010
1 The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years
2 The cost of the machinery is $ 525,000, and the fair value of the asset on January 1, 2010, is $700,000.
3 At the end of the lease term the asset reverts to the lessor. At the end of the lease term the asset has guaranteed residual value of $ 100,000. Jensen depreciates all if its equipment on a straight-line basis
4 The lease agreement requires equal annual rental payments, beginning on January 1, 2010.
5 The collectability of the lease payments is reasonable predictable, and there are no important uncertainties surrounding the amount of costs yet to be incurred by the lessor.
6 Glaus desires a 10% rate of return on its investments. Jensen's incremental borrowing rate is 11%, and the lessor's implicit rate is unknown.
Instructions:
(Assume the accounting period ends on December 31)
(a.) Discuss the nature of this lease for both the lessee and the lessor.
(b.) Calculate the amount of the annual rental payment required.
(c.) Compute the present value of the minimum lease payments.
(d.) Prepare the journal entries Jensen would make in 2010 and 2011 related to the lease arrangements.
(e.) Prepare the journal entries Glaus would make in 2010 and 2011.
Click here for the solution: (Lessee-Lessor Entries, Sales-Type Lease) Glaus Leasing Company agrees to lease machinery to Jensen Corporation on January 1, 2010
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