Adjusting Entries Essay

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ACC 500 Fall 2012 CASE 2 Adjusting Entries Due Date: Wednesday Nov. 14 Submission of this assignment is made under the terms of our academic integrity code. Team: _______________________________________________________ Each adjustment is worth 3 points. There is no partial credit for individual entries. The summary table at the end is worth 8 points. The case is worth 50 points. You are presented with the following information for Little Co. Consider all situations independently. The company has a 12/31 year end and each item should be considered as a possible adjusting entry. Please present each adjusting entry as you deem necessary in good form followed by a brief…show more content…
The Prepaid Insurance account has a balance of $1,200. Your analysis indicates that the correct balance in Insurance Expense should be $3,500. A6: The inventory analysis of supplies at year end indicates that the company had $12,200 of supplies on hand. The unadjusted trial balance shows a Supplies Inventory of $14,000 and a Supplies Expense balance of $22,000. Adjustment of supplies on hand (14000-12200) A7: The company has a balance in Notes Receivable of $15,000. The note is due in 3 years and carries a 6% interest rate. Interest is paid on the note each January. Interest has been correctly accrued through September 30. Interest Expense Rate = 15,000 * 0.06 * 3 = 2,700 per year so per month = 2,700/12 = 225 and from the end of September to the 12/31 its 3 months meaning 225*3 = 675$ A8: The company has recorded depreciation expense through September 30. Data on the company’s PP&E is as follows: |Type |Cost |Useful Life |Salvage Value |Accumulated | | | | | |Depreciation | |Land |$50,000 | NMF
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