Week Two Exercise Assignment : Revenue And Expenses

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Week Two Exercise Assignment Revenue and Expenses 1. Recognition of concepts. Jim Armstrong operates a small company that books enter¬tainers for theaters, parties, conventions, and so forth. The company’s fiscal year ends on June 30. Consider the following items and classify each as either (1) pre¬paid expense, (2) unearned revenue, (3) accrued expense, (4) accrued revenue, or (5) none of the foregoing. a Interest owed on the company 's bank loan, to be paid in early July Prepaid expense b Professional fees earned but not billed as of June 30 Accrued revenue c Office supplies on hand at year-end Prepaid expense d An advance payment from a client for a performance next month at a convention Unearned revenue e The payment in part…show more content…
D $1500 is a debit for account receivable and $ 1500 credit for service revenues $1500 is the total increase revenue Salaries owed to employees at year-end amounted to $1,000. C $1000 is a debit for salaries expense and $1000 credit for salaries payable $1000 is the total increase expenses The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies was actually on hand at the end of the period. A $5500 is a debit for supplies expense and $5500 credit for supplies $5500 is the total increase expenses The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months’ rent of Sally Corporation’s headquarters, beginning on November 1. A $6000 is a debit for rent expense and $6000 credit for prepaid rent $6000 is the total increase expenses Sally Corporation’s accounting year ends on December 31. Instructions Analyze the five preceding cases individually and determine the following: a. The type of adjusting entry needed at year-end (Use the following codes: A, adjust¬ment of a prepaid expense; B, adjustment of an unearned revenue; C, adjustment to record an accrued expense; or D, adjustment to record an accrued revenue.) b. The year-end journal entry to adjust the accounts c. The income statement impact of each adjustment (e.g., increases total
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