A three-year fire insurance policy beginning on September 1, 2018, was erroneously debited to the Land account when the $720 premium was paid. During 2020 the company sold all its land, reducing the Land account to a zero balance. Using the amount recorded in the Land account, the company suffered a $400 loss on the sale. Instructions: Prepare two correcting entries Assuming that the books have not been closed in 2020 Assuming that the books have been closed for 2020.
Q: True or False: Borrowing and repaying debt principal does not impact net worth. Select one: True…
A: Net worth is the total value of your assets, both financial and non-financial, less any liabilities.…
Q: River and Co. has entered into a non-cancellable purchase contract which the company to purchase…
A: The company may enter into a non-non-cancellable purchase contract for the inventory to be…
Q: Dream Big Pillow Co., pays 65% of its purchases in the month of purchase, 30% the month after the…
A: Introduction:- 65% of the purchase is paid in the month of purchase, 30% in the month after…
Q: Dream Big Pillow Co., pays 65% of its purchases in the month of purchase, 30% the month after the…
A: The cash payment to suppliers is recorded in the cash disbursement schedule.
Q: The normal balance of an account is the side of the account (either the debit side or the credit…
A: Every account has a normal balance of a positive value. Assets positive value is debit side.…
Q: Waterway, Inc., has 4900 shares of 3%, $100 par value, cumulative preferred stock and 39200 shares…
A: A dividend is the payment of a part of a company's value to a certain group of shareholders…
Q: How important is a purchases budget and how does it help managers run a company?
A: budget is prepared by the company in order to estimate the income and expenditure that is to be done…
Q: An economic event or condition that directly changes the financial condition of the company or…
A: A company is a kind of business entity that runs its business operations in order to earn income.
Q: A corporation purchases 89000 shares of its own $30 par common stock for $47 per share, recording it…
A: Stockholders' equity, also known as shareholders' or shareholders' equity, is the amount of assets…
Q: Which of the following types of messages might the Active Auditor display? Question 9 options:…
A: The Auditor's report is provided as an assurance service in order for the user to make decisions…
Q: An information system that provides reports to stakeholders about the economic activities and…
A: Accounting: The practice of documenting financial transactions that are relevant to a company is…
Q: Which financial statement reflects the summary of the changes in owner’s equity (beginning owner's…
A: Balanced sheet will present balance of all assets, all liabilities and owners equity.
Q: Tyler Company uses a weighted average process costing system. Material is added at the start of…
A: Ending WIP is the units that are yet to be completely produced at the end of the period.
Q: If the corporation is considered as de facto, who can question its existence? Board of Directors…
A: When corporation is considered as de facto, it means that corporation exist even though it may not…
Q: How important is a purchases budget and how does it help managers run a company?
A: Purchase Budget: A company's acquisitions budget will outline the total quantity of stock that it…
Q: A Ltd owns an owner-occupied asset that is measured using the revaluation model. The asset’s…
A: As per revaluation model, The asset is carried at a revalued amount, being its fair value at the…
Q: So that he will not be delayed in delivering the coffee beans, D gave an additional P50,000.00. What…
A: The answer for the multiple choice question and relevant explanation are presented hereunder : D was…
Q: 5. The following is the year ended data for Baker Company: Sales Revenue £152,000 Cost of Goods…
A: Cost of goods available for sale is the sum of beginning inventory and cost of goods manufactured.
Q: Which of the following types of messages might the Active Auditor display? Question 9 options:…
A: Solution: Following type of messages might the active auditor displays: 1. Warnings that indicate…
Q: A bank offered a 1-year loan to a commercial customer. The instrument is a discounted note with a…
A: Lets understand the basics. Effective interest rate is a rate at which interest is effectively paid.…
Q: nount of (500) million Iraqi dinars for e purchase of equipment, and a period (8) years estimated…
A: Explanation of Concept:- Equipment is the fixed assets which is been used as per the life pre…
Q: What are business transactions called that increase owner’s equity as a result of providing a…
A: A liability is amount payable or obligation which results from past event, whose payment needs…
Q: On April 2 a corporation purchased for cash 6,000 shares of its own $12 par common stock at $27 a…
A: Treasury stocks are repurchased shares of the company. The firm can reissue these stocks at a…
Q: What is a business owned by one individual called and the easiest legal form of business to organize…
A: Solution: Limited liability company, partnership and corporation needs more than one individual to…
Q: 3. Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for…
A: Total variable cost per table = 50+10+15 = £75
Q: Waterway Corporation’s December 31, 2020 balance sheet showed the following: 8% preferred stock,…
A: Paid in capital represents the shares issued and paid by the shareholders' equity of the company. It…
Q: . X assigned his partnership shares to Y. X did not get the consent from the other partners but he…
A: Comment- We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: Rachel, Monica and Phoebe are partners with capital balances of P896,000, P3,120,000 an P3,160,000…
A: Partnership refers to the contractual contract among the two or more persons or individual who came…
Q: What principle is applied when the properties bought by a corporation is wholly owned by the…
A: Corporation is one of the legal form of business organisation, under which several members invest…
Q: cludes the following balances: Common Stock, $41000; Paid-in Capital in Excess of Par, $64200;…
A: Capital stock is the amount of common and preferred shares that a company is authorized to issue.…
Q: 2. For financial accounting purposes, what is the total amount of period costs igcurred to sell…
A: Period cost are those cost which is not directly connected with the production process. All other…
Q: Activity IV. Journal Entry Jerome Garcia started a new business and completed these transactions…
A: The journal entries are prepared to keep the record of day to day transactions of the business.
Q: A company reports the following information for its direct labor. Actual hours of direct labor used…
A: Direct Labor rate variance = (Actual rate per hour - Standard rate per hour)*Actual hours worked…
Q: Problemt No. 1- Fallen Moon Legal Services Below are the details from the books of Fallen Moon Legal…
A: Adjusting entries are passed at the end of an accounting period to record any unrecorded income or…
Q: Kate commenced business as a sole trader under the name “Mug Lover” on 1 December, 2020. Mug Lover…
A: Introduction:- Ledger is the process of transferring the entries from journal to particular ledger…
Q: What is the purpose of the statement of cash flows? What are the three types of cash flow…
A: The statement of cash flows is one of the financial statements that shows the net result of changes…
Q: What is the normal balance of cash? Group of answer choices This is an ambiguous question debit…
A: Current assets are cash and cash equivalent and include those assets which are expected to be used…
Q: the lease liability be recognized at January 1, 2020, after making the first payment of P260,000 to…
A: Explanation of Concept "A person or a firm who gives asset on lease to another person or a firm…
Q: ficient Securiti
A: Stakeholders are those who are interested in the company and can influence or be influenced by the…
Q: ABC Company uses a weighted average process costing system and started 36,000 units this month.…
A: The equivalent unit under the weighted average method is the sum of units completed and ending work…
Q: Each Tuesday, Ryan Airlines reduces its one-way ticket from Fort Wayne to Chicago from $136 to $25.…
A: Discount is the amount which is offered by the selller to the buyer to increase revenue. It is…
Q: Use the following Unadjusted Trial Balance for Monroe Entertainment Company for questions 44 - 49:…
A: Solution: Liabilities are present obligation as a result of past event that requires outflow of…
Q: Arthoney Ircis trial balance cortairs the fallowing balances: Cash $535 Accounts Payable $344…
A: Introduction: Trial Balance: All the final ledger accounts balances are posted in Trial balance to…
Q: reate a new company in Microsoft office Accouting
A: STEP.1 OPEN MISCROSOFT OFFICE ACCOUNTING SOFTWARE. STEP2. SELECT START A NEW COMPANY STEP3.A NEW…
Q: BenLin Co. is a lessee under finance lease. The asset is recorded at P4,500,000 and has economic…
A:
Q: True or False: Borrowing and repaying debt principal does not impact net worth. Select one: True…
A: Net worth is the sum of all your assets, including financial and non-financial, less any…
Q: Use the following Unadjusted Trial Balance for Monroe Entertainment Company for questions 44 - 49:…
A: Net income is the amount of money earned by an entity after deducting the expenses from the…
Q: Gene and Dixie, husband and wife (ages 35 and 32), bc gross income of $95,000 in 2017, and they are…
A: IRA contribution limitations and eligibility are determined by your modified adjusted gross income,…
Q: The partnership is in need for an additional capital. As a capitalist partner, B was compelled to…
A: Capitalist partner refers to the partner who contributes property, money and his work or industry to…
Q: ABC Company leased into a ten-year non-cancelable lease requiring year-end payments of P1,200,000 on…
A: Lease Payment: P1,200,000 Implicit interest rate: 10% Initial direct cost: P150,000 Amount financed…
A three-year fire insurance policy beginning on September 1, 2018, was erroneously debited to the Land account when the $720 premium was paid. During 2020 the company sold all its land, reducing the Land account to a zero balance. Using the amount recorded in the Land account, the company suffered a $400 loss on the sale.
Instructions: Prepare two correcting entries
-
Assuming that the books have not been closed in 2020
-
Assuming that the books have been closed for 2020.
Step by step
Solved in 2 steps with 3 images
- During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.At the end of 2020, while auditing Sandlin Companys books, before the books have been closed, you find the following items: a. A building with a 30-year life (no residual value, depreciated using the straight-line method) was purchased on January 1, 2020, by issuing a 90,000 non-interest-bearing, 4-year note. The entry made to record the purchase was a debit to Building and a credit to Notes Payable for 90,000; 12% is a fair rate of interest on the note. b. The inventory at the end of 2020 was found to be overstated by 15,000. At the same time, it was discovered that the inventory at the end of 2019 had been overstated by 35,000. The company uses the perpetual inventory system. c. For the last 3 years, the company has failed to accrue salaries and w-ages. The correct amounts at the end of each year were: 2018, 12,000; 2019, 18,000; and 2020, 10,000. Required: 1. Prepare journal entries to correct the errors. Ignore income taxes. 2. Assume, instead, that the company discovered the errors after it had closed the books. Prepare journal entries to correct the errors. Ignore income taxes.Worksheet Devlin Company has prepared the following partially completed worksheet for the year ended December 31, 2019: The following additional information is available: (a) salaries accrued but unpaid total 250; (b) the 80 heat and light bill for December has not been recorded or paid; (c) depreciation expense totals 810 on the buildings and equipment; (d) interest accrued on the note payable totals 380 (this will be paid when the note is repaid); (e) the company leases a portion of its floor space to KT Daniel Specialty Company for 50 per month, and KT Daniel has not yet paid its December rent; (f) interest accrued on the note receivable totals 80; (g) bad debts expense is 70; and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2017. Required: 1. Complete the worksheet. (Round to the nearest dollar.) 2. Prepare the companys financial statements. 3. Prepare (a) adjusting and (b) closing entries in the general journal.
- The following are independent errors: a. In January 2019, repair costs of 9,000 were debited to the Machinery account. At the beginning of 2019, the book value of the machinery was 100,000. No residual value is expected, the remaining estimated life is 10 years, and straight-line depreciation is used. b. All purchases of materials for construction contracts still in progress have been immediately expensed. It is discovered that the use of these materials was 10,000 during 2018 and 12,000 during 2019. c. Depreciation on manufacturing equipment has been excluded from manufacturing costs and treated as a period expense. During 2019, 40,000 of depreciation was accounted for in that manner. Production was 15,000 units during 2019, of which 3,000 remained in inventory at the end of the year. Assume there was no inventory at the beginning of 2019. Required: Prepare journal entries for the preceding errors discovered during 2020. Ignore income taxes.At the beginning of 2020, Holden Companys controller asked you to prepare correcting entries for the following three situations: 1. Machine X was purchased for 100,000 on January 1, 2015. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 45,000. The estimated residual value remains at 10,000, but the service life is now estimated to be 1 year longer than originally estimated. 2. Machine Y was purchased for 40,000 on January 1, 2018. It had an estimated residual value of 4,000 and an estimated service life of 8 years. It has been depreciated under the sum-of-the-years-digits method for 2 years. Now, the company has decided to change to the straight-line method. 3. Machine Z was purchased for 80,000 on January 1, 2019. Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value is 8,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry for each situation to record the depreciation for 2020. Ignore income taxes.The unadjusted trial balance of Recessive Interiors at January 31, 2019, the end of the year, follows: The data needed to determine year-end adjustments are as follows: a. Supplies on hand at January 31 are 2,850. b. Insurance premiums expired during the year are 3,150. c. Depreciation of equipment during the year is 5,250. d. Depreciation of trucks during the year is 4,000. e. Wages accrued but not paid at January 31 are 900. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors chart of accounts should be used: Wages Payable, 22; Depreciation ExpenseEquipment, 54; Supplies Expense, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.
- Worksheet Victoria Company has the following account balances on December 31, 2019, prior to any adjustments: Additional adjustment information: (a) depreciation on buildings, 1,100; on equipment, 600; (b) bad debts expense, 240; (c) interest accumulated but not paid: on note payable, 50; on mortgage payable, 530 (this interest is due during the next accounting period); (d) insurance expired, 175; (e) salaries accrued but not paid 370; (f) rent was collected in advance and the performance obligation is now satisfied, 800; (g) office supplies cm hand at year-end, 230 (expensed when originally purchased earlier in the year); and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2020. Required: 1. Transfer the account balances to a 10-column worksheet and prepare a trial balance. 2. Prepare the adjusting entries in the general journal and complete the worksheet. 3. Prepare the companys income statement, retained earnings statement, and balance sheet. 4. Prepare closing entries in the general journal.The Jessica Co. has the following errors on its books as of December 31, 2020. The books for 2020 have not yet been closed. a. On January 1, 2018, a machine had been purchased for $6,500. The machine had an estimated life of five years, but it was expensed in error. Straight-line depreciation with no salvage value should have been used. b. On January 1, 2019, the company bought a four-year insurance policy for $800 and immediately charged the full premium to expense. Required: Prepare journal entries to correct these errors on December 31, 2020. Ignore income taxes.On May 16, 2019, an entity purchased a fire insurance policy covering a property for a period of 2 years. The P16,800 cost of policy was paid in cash. At the end of 2019, the company will reduce Prepaid Insurance for this policy by? a. P5,600 b.P5,650 c. P5,250 d. P8,400
- A warehouse was bought by Great Co on November 30, 2019 costing P3,400,000 for storage of product Y. It has an estimated useful life of 15 years and salvage value of P400,000. The company also bought an insurance for the warehouse with coverage up to P2,500,000. On December 1, 2019, a fire broke out in the warehouse and consumed it. On the same date, the company booked a claims receivable from the insurance entity. The insurance entity took an investigation on January 15, 2020 and concluded that cause of the fire was not due to some fortuitous event. The reporting date of the company is on December 31, 2019 and the financial statements were approved for issue on March 31, 2020. What is the adjusting journal entry should be made?How much is the total loss to be recorded by the company?A warehouse was bought by Great Co on November 30, 2019 costing P3,400,000 for storage of product Y. It has an estimated useful life of 15 years and salvage value of P400,000. The company also bought an insurance for the warehouse with coverage up to P2,500,000. On December 1, 2019, a fire broke out in the warehouse and consumed it. On the same date, the company booked a claims receivable from the insurance entity. The insurance entity took an investigation on January 15, 2020 and concluded that cause of the fire was not due to some fortuitous event. The reporting date of the company is on December 31, 2019 and the financial statements were approved for issue on March 31, 2020. 1. What is the adjusting journal entry should be made? 2. How much is the total loss to be recorded by the company?The warehouse had a fire on November 7, 2021, which resulted in the destruction of merchandise worth $12,000. The insurance provider has declared that it would only cover the first $3,000 of the claim under the provisions of the insurance contract. There are currently no entries to document this. Create modifying entries.