Engels Selected accounts of Hillwood Inc. are shown below for the beginning (January 1) of 2015. Debits Credits Prepaid €23 000 Insurance Supplies €40 000 Unearned €219 000 Revenue Yearly financial statements are prepared and the following information is provided for 2015: a) Prepaid Insurance represents a four-year premium paid on January 1, 2015 b) At the end of 2015, supplies of €8 000 were still available (assume that the company has not purchased any supplies during 2015) c) On January 1, 2015, Hillwood Inc. sold five-year lasting software licenses to its clients with 2015 being the first year that the clients Used the software Requirement: Based on the information above, what is the net income of Hillwood Inc. for the year 2015? Assume that the company has not completed any other transaction during 2015. You can ignore taxes. €6 050 €181 250 €-1 950 €30 050

Engels Selected accounts of Hillwood Inc. are shown below for the beginning (January 1) of 2015. Debits Credits Prepaid €23 000 Insurance Supplies €40 000 Unearned €219 000 Revenue Yearly financial statements are prepared and the following information is provided for 2015: a) Prepaid Insurance represents a four-year premium paid on January 1, 2015 b) At the end of 2015, supplies of €8 000 were still available (assume that the company has not purchased any supplies during 2015) c) On January 1, 2015, Hillwood Inc. sold five-year lasting software licenses to its clients with 2015 being the first year that the clients Used the software Requirement: Based on the information above, what is the net income of Hillwood Inc. for the year 2015? Assume that the company has not completed any other transaction during 2015. You can ignore taxes. €6 050 €181 250 €-1 950 €30 050

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 2TIF: Real-world annual report The financial statements for Nike, Inc. (NKE), are presented in Appendix E...

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Adjusting Entries Kretz Corporation prepares monthly financial statements and therefore adjusts its accounts at the end of every month. The following information is available for March 2016: Kretz Corporation takes out a 90-day, 8%, $15,000 note on March 1, 2016, with interest and principal to be paid at maturity. The asset account Office Supplies on Hand has a balance of $1,280 on March 1, 2016. During March, Kretz adds $750 to the account for purchases during the period. A count of the supplies on hand at the end of March indicates a balance of $1,370. The company purchased office equipment last year for $62,600. The equipment has an estimated useful life of six years and an estimated salvage value of $5,000. The companys plant operates seven days per week with a daily payroll of $950. Wage earners are paid every Sunday. The last day of the month is Thursday, March 31. The company rented an idle warehouse to a neighboring business on February 1, 2016, at a rate of $2,500 per month. On this date, Kretz Corporation credited Rent Collected in Advance for six months rent received in advance. On March 1, 2016, Kretz Corporation credited a liability account, Customer Deposits, for $4,800. This sum represents an amount that a customer paid in advance and that Kretz will earn evenly over a four-month period. Based on its income for the month, Kretz Corporation estimates that federal income taxes for March amount to $3,900. Required For each of the preceding situations, prepare in general journal form the appropriate adjusting entry to be recorded on March 31, 2016.
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