Agditional Information relating to 1. Treasury bills were purchased on October 1, 2006. Total interest of $2,400 will be received at maturity. No accrual adjustments were made in 2006. 2. Treasury bonds, were purchased on December 1, 2006. Total interest of $5,000 will be received at maturity. 3. IBM Co. Stock of 5,000 shares were purchased on February 8, 2005 for $2 per share. As of December 31, 2006 the market value of IBM was $13 per share. 4. The company uses the Allowance method, and estimates its uncollectible accounts by analyzing the aging of its receivables. After analyzing its December 31, 2006 Accounts Receivable aging, the company determined the amount of its "Uncollectible Accounts" to be $2.600. tments 5. Prepaid rent account represents rent prepaid on December 1, 2006, covering the months of December & January. 6. Unearned revenue of $10,000 was received from a customer on November 1, 2006. Of this account, 60% of sales is still unearned as of December 31, 2006. 7. Property Plant and Equipment has a useful life of 5 years. The Company prepares the depreciation adjustment only once a year on December 31. Required: a) Prepare the adjusting entries (1-7 above) as of December 31, 2006 using the journal entry format. b) List the 'cash and cash equivalents' of the company (only account names).
Agditional Information relating to 1. Treasury bills were purchased on October 1, 2006. Total interest of $2,400 will be received at maturity. No accrual adjustments were made in 2006. 2. Treasury bonds, were purchased on December 1, 2006. Total interest of $5,000 will be received at maturity. 3. IBM Co. Stock of 5,000 shares were purchased on February 8, 2005 for $2 per share. As of December 31, 2006 the market value of IBM was $13 per share. 4. The company uses the Allowance method, and estimates its uncollectible accounts by analyzing the aging of its receivables. After analyzing its December 31, 2006 Accounts Receivable aging, the company determined the amount of its "Uncollectible Accounts" to be $2.600. tments 5. Prepaid rent account represents rent prepaid on December 1, 2006, covering the months of December & January. 6. Unearned revenue of $10,000 was received from a customer on November 1, 2006. Of this account, 60% of sales is still unearned as of December 31, 2006. 7. Property Plant and Equipment has a useful life of 5 years. The Company prepares the depreciation adjustment only once a year on December 31. Required: a) Prepare the adjusting entries (1-7 above) as of December 31, 2006 using the journal entry format. b) List the 'cash and cash equivalents' of the company (only account names).
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter21: The Statement Of Cash Flows
Section: Chapter Questions
Problem 17P: (Appendix 21.1) Comprehensive The following are Adair Companys December 31, 2018, post-closing trial...
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Transcribed Image Text:QUESTION 2: The following is the unadjusted trial balance for Tricom Co. as of December 31, 2006.
Una djusted Trial Balance, TRICOM Co.
December 31, 2006
Cash on hand
$10,000
20,000
20,000
Cash at banks
Treasury Bills (Maturity March 30, 2007)
Treasury Bonds (Maturity Sept. 29, 2007)
Trading Stocks (IBM C..)
Allowance to adjust trading stocks to market (Debit Balance)
30,000
10,000
20,000
70,000
1,000
Accounts receivable
Allowance for Uncollectible Accounts
Inventories
60,000
50,000
4,000
15,000
3,000
Notes Receivable
Prepaid Rent
Property, Plant and Equipment
Accumulated depreciation, Property, Plant and Equip.
Accounts payable
Unearned revenue
70,000
10,000
Capital
Sales
160,000
200,000
Sales returns and allowances
3,000
Cost of Goods sold
Rent expenses
Salary expenses
Other expenses
76,000
22,000
30,000
4,000
AdditionaiInformation relating to year-end adjustments.
1. Treasury bills were purchased on October 1, 2006. Total interest of $2,400 will be received at maturity.
No accrual adjustments were made in 2006.
2. Treasury bonds, were purchased on December 1, 2006. Total interest of $5,000 will be received at
maturity.
3. IBM Co. Stock of 5,000 shares were purchased on February 8, 2005 for $2 per share. As of December 31,
2006 the market value of IBM was $13 per share.
4. The company uses the Allowance method, and estimates its uncollectible accounts by analyzing the aging
of its receivables. After analyzing its December 31, 2006 Accounts Receivable aging, the company
determined the amount of its Uncollectible Accounts" to be $2,600.
5. Prepaid rent account represents rent prepaid on December 1, 2006, covering the months of December &
January.
6. Unearned revenue of $10,000 was received from a customer on November 1, 2006. Of this account, 60%
of sales is still unearned as of December 31, 2006.
7. Property Plant and Equipment has a useful life of 5 years. The Company prepares the depreciation
adjustment only once a year on December 31.
Required:
a) Prepare the adjusting entries (1-7 above) as of December 31, 2006 using the journal entry format.
b) List the 'cash and cash equivalents' of the company (only account names).
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