999 Words Mar 30th, 2013 4 Pages
ACC 500 Fall 2012

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
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