Assignment 6 - Adjusting Entries, Malinaw Photography was established by Alex B. Malinaw on Oct. 1, 2021. Below is Malinaw Photography's data after its first 3 months of operation. MALINAW PHOTOGRAPHY UNADJUSTED TRIAL BALANCE December 31, 2021 DEBIT CREDIT CASH 130,000 UNUSED PHOTO SUPPLIES 25,000 EQUIPMENT 120,000 ACCOUNTS PAYABLE 70,000 ABMALINAW, CAPITAL 200,000 SERVICE REVENUE 40,000 TAXES & LICENSES 4,000 UTILITIES EXPENSE 1,000 RENT EXPENSE 10,000 SALARY EXPENSE 20,000 TOTALS 310,000 310,000 Additional information: (data for the Dec. 31, 2021 adjusting entries) 1. The remaining unused photo supplies on Dec. 31, 2021 is P20,000. 2. The equipment was acquired on Oct. 1, 2021 with 5 years estimated useful life. 3. Received Meralco billing amounting to P2,000 for electricity used to be paid on Jan. 202 4. Additional account titles to be used: Accumulated Depreciation-Equipment, Photo Supplies Expense, Depreciation Expense, Accrued Utilities Expense Payable

Assignment 6 - Adjusting Entries, Malinaw Photography was established by Alex B. Malinaw on Oct. 1, 2021. Below is Malinaw Photography's data after its first 3 months of operation. MALINAW PHOTOGRAPHY UNADJUSTED TRIAL BALANCE December 31, 2021 DEBIT CREDIT CASH 130,000 UNUSED PHOTO SUPPLIES 25,000 EQUIPMENT 120,000 ACCOUNTS PAYABLE 70,000 ABMALINAW, CAPITAL 200,000 SERVICE REVENUE 40,000 TAXES & LICENSES 4,000 UTILITIES EXPENSE 1,000 RENT EXPENSE 10,000 SALARY EXPENSE 20,000 TOTALS 310,000 310,000 Additional information: (data for the Dec. 31, 2021 adjusting entries) 1. The remaining unused photo supplies on Dec. 31, 2021 is P20,000. 2. The equipment was acquired on Oct. 1, 2021 with 5 years estimated useful life. 3. Received Meralco billing amounting to P2,000 for electricity used to be paid on Jan. 202 4. Additional account titles to be used: Accumulated Depreciation-Equipment, Photo Supplies Expense, Depreciation Expense, Accrued Utilities Expense Payable

Corporate Financial Accounting

15th Edition

ISBN:9781337398169

Author:Carl Warren, Jeff Jones

Publisher:Carl Warren, Jeff Jones

Chapter3: The Adjusting Process

Section: Chapter Questions

Problem 3.5BPR: Adjusting entries and adjusted trial balances Reece Financial Services Co., which specializes in...

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Adjusting Entries Exercise 3-52 Allentown Services Inc. is preparing adjusting entries for the year ending December 31, 2019. The following data are available: Interest is owed at December 31, 2019, on a 6-month, 8% note. Allentown borrowed $120,ooo from NBD on September 1, 2019. Allentown provides daily building maintenance services to Mack Trucks for a quarterly fee of $2,700 payable on the fifteenth of the month following the end of each quarter. No entries have been made for the services provided to Mack Trucks during the quarter ended December 31, and the related bill will not be sent until January 15, 2020. At the beginning of 2019, the cost of office supplies on hand was $1,220. During 2019, office supplies with a total cost of $6,480 were purchased from Office Depot and debited to office supplies inventory. On December 31, 2019, Allentown determined the cost of office supplies on hand to be $970. On September 23, 2019, Allentown received a $7,650 payment from Bethlehem Steel for 9 months of maintenance services beginning on October 1, 2019. The entire amount was credited to unearned service revenue when received. Required: Prepare the appropriate adjusting entries at December 31, 2019. CONCEPTUAL CONNECTION What would be the effect on the balance sheet and the income statement if the accountant failed to make the above adjusting entries?
Brief Exercise 3-31 Adjusting Entries-Accruals Nichols Company had the following items that required adjustment at 31, 2019. Electricity used during December was estimated to $320. This amount will paid in January. Owed wages to employees of $3,250 that were earned in December but unrecorded and unpaid as of the end of the year. Services of $4,900 were performed in December but unbilled and unpaid as of year end. Required: Prepare the adjusting entries needed at December 31. CONCEPTUAL CONNECTION What is the effect on the financial statements if these adjusting entries were not made?
Adjustment data on an end-of-period spreadsheet Alert Security Services Co. offers security services to business clients. The trial balance for Alert Security Services Co. has been prepared on the following end-of-period spreadsheet for the year ended October 31, 2019: Accum. Depr.Equipment 4 Accounts Payable 36 Wages Payable 0 Brenda Schultz, Capital 260 Brenda Schultz, Drawing 8 Fees Earned 200 Wages Expense 110 Rent Expense 12 Insurance Expense 0 Utilities Expense 6 Supplies Expense 0 Depreciation Expense 0 Miscellaneous Expense 2 500 500 The data for year-end adjustments are as follows: a.Fees earned but not yet billed, 13 b.Supplies on hand, 4. c.Insurance premiums expired, 10. d.Depreciation expense, 3. e.Wages accrued but not paid, 1. Enter the adjustment data and place the balances in the Adjusted Trial Balance columns.
Net Income: 51,150 Ledger accounts, adjusting entries, financial statements, and closing entries; optional spreadsheet The unadjusted trial balance of Lakota Freight Co. at March 31, 20Y4, the end of the year, follows: The data needed to determine year-end adjustments are as follows (a) Supplies on hand at March 31 arc 7,500 (b) Insurance premiums expired during year are 1,800. (c) Depreciation of equipment during year is 8,350 (d) Depreciation of trucks during year is 6,200 (e) Wages accrued but not paid at March 31 are 600 Instructions 1. For each account listed in the 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 account 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 Lakota Freight Co.s clean of accounts should lie used: Wages Payable, 22; Supplies Expense, 52; Depreciation ExpenseEquipment. 55; Depreciation ExpenseTrucks. 56; Insurance Expense. 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended March 31, 20Y4, additional common stink of 6,000 was issued 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.
Exercise 3-46 Identification and Analysis of Adjusting Entries Medina Motor Service is preparing adjusting entries for the year ended December 31, 2019. The following items describe Medina s continuous transactions during 2019: Medinas salaried employees are paid on the last day of every month. Medinas hourly employees are paid every other Friday for the 2 weeks' work. The next payday falls on January 5, 2020. In November 2019, Medina borrowed $600,000 from Bank One, giving a 9% note payable with interest due in January 2020. The note was properly recorded. Medina rents a portion of its parking lot to the neighboring business under a long-term lease agreement that requires payment of rent 6 months in advance on April 1 and October 1 of each year. The October 1, 2019, payment was made and recorded as prepaid rent. Medinas department recognizes the entire revenue on every auto service job when the job is complete. At December 31, several service jobs are in process. Medina recognizes depreciation on shop equipment annually at the end of each year. Medina purchases all of its office supplies from Office Supplies Inc. All purchases are recorded in the supplies account. Supplies expense is calculated and recorded annually at the end of each year. Required: Indicate whether or not each item requires an adjusting entry at December 31, 2019. If an item requires an adjusting entry, indicate which accounts are increased by the adjustment and which are decreased.
Case 3-73 Recognition of Service Contract Revenue Zac Murphy is president of Blooming Colors Inc. which provides landscaping services in Tallahassee, Florida. On November 20, 2019, Mr. Murphy signed a service contract with Eastern State University. Under the contract, Blooming Colors will provide landscaping services for all Of Easterns buildings for a period of 2 years beginning on January l, 2020, and Eastern will pay Blooming Colors on a monthly basis beginning on January 31, 2020. Although the same amount of landscaping services will be rendered in every month, the contract provides for higher monthly payments in the first year. Initially, Mr. Murphy proposed that the revenue from the contract should be recognized when the contract is signed in 2019; however, his accountant, Sue Storm, convinced him that this would be inappropriate. Then Mr. Murphy proposed that the revenue should be recognized in an amount equal to the cash collected under the contract. Again, Ms. Storm argued against his proposal, indicating that generally accepted accounting principles (GAAP) required recognition of an equal amount of contract revenue each month. Required: Put yourself in the position of Sue Storm. How would you convince Mr. Murphy that his two proposals are unacceptable and that an equal amount of revenue should be recognized every month?
Case 3-73 Recognition of Service Contract Revenue Zac Murphy is president of Blooming Colors Inc. which provides landscaping services in Tallahassee, Florida. On November 20, 2019, Mr. Murphy signed a service contract with Eastern State University. Under the contract, Blooming Colors will provide landscaping services for all Of Easterns buildings for a period of 2 years beginning on January l, 2020, and Eastern will pay Blooming Colors on a monthly basis beginning on January 31, 2020. Although the same amount of landscaping services will be rendered in every month, the contract provides for higher monthly payments in the first year. Initially, Mr. Murphy proposed that the revenue from the contract should be recognized when the contract is signed in 2019; however, his accountant, Sue Storm, convinced him that this would be inappropriate. Then Mr. Murphy proposed that the revenue should be recognized in an amount equal to the cash collected under the contract. Again, Ms. Storm argued against his proposal, indicating that generally accepted accounting principles (GAAP) required recognition of an equal amount of contract revenue each month. Required: 3. If Ms. Storms proposal is adopted. how would the contract be reflected in the balancesheets at the end of 2019 and at the end of 2020?
Case 3-73 Recognition of Service Contract Revenue Zac Murphy is president of Blooming Colors Inc. which provides landscaping services in Tallahassee, Florida. On November 20, 2019, Mr. Murphy signed a service contract with Eastern State University. Under the contract, Blooming Colors will provide landscaping services for all Of Easterns buildings for a period of 2 years beginning on January l, 2020, and Eastern will pay Blooming Colors on a monthly basis beginning on January 31, 2020. Although the same amount of landscaping services will be rendered in every month, the contract provides for higher monthly payments in the first year. Initially, Mr. Murphy proposed that the revenue from the contract should be recognized when the contract is signed in 2019; however, his accountant, Sue Storm, convinced him that this would be inappropriate. Then Mr. Murphy proposed that the revenue should be recognized in an amount equal to the cash collected under the contract. Again, Ms. Storm argued against his proposal, indicating that generally accepted accounting principles (GAAP) required recognition of an equal amount of contract revenue each month. Required: 1. Give a reason that might explain Mr. Murphys desire to recognize contract revenue earlier rather than later.
Cornerstone Exercise 3-17 Accrued Revenue Adjusting Entries Powers Rental Service had the following items that require adjustment at year end. Earned $9,880 of revenue from the rental of equipment for which the customer had not yet paid. Interest of S650 on a note receivable has been earned but not yet received. Required: Prepare the adjusting entries needed at December 31. What is the effect on the financial statements if these adjusting entries are not made?
Exercise 3-40 Revenue and Expense Recognition Electronic Repair Company repaired a high-definition television for Sarah Merrifield in December 2019. Sarah paid $80 at the time of the repair and agreed to pay Electronic Repair $80 each month for 5 months beginning on January 15, 2020. Electronic Repair used $120 of supplies, which were purchased in November 2020, to repair the television. Assume that Electronic Repair uses accrual-basis accounting. Required: In what month or months should revenue from this service be recorded by Electronic Repaid? In what month or months should the expense related to the repair of the television be recorded by Electronic Repair? CONCEPTUAL CONNECTION Describe the accounting principles used to answer the above questions.
Income: 27,350 accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 20Y5, the end of the fiscal year, follows: The data needed to determine ear-end adjustments are as follows: (a) Wages accrued but not paid at August 31 are 2,200. (b) Depreciation of equipment during the year it 8,150 (c) Laundry supplies on hand at August 31 are 2,000. (d) Insurance premiums expired during the year are 5,300. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in a T account. Identify the balance as Aug. 51 Bal. In addition, add T accounts for Wages Payable. Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3. Journalize and post the adjusting entries. Identify the adjustments by Adj. and the new balances as Adj. Bal. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of stockholders equity, and a balance sheet. During the year ended August 51, 20Y5, common stock of 3,000 was issued. 6. Journalize and post the closing entries. Identify the closing entries by Clos. 7. Prepare a post-closing trial balance.
Cornerstone Exercise 3-18 Accrued Expense Adjusting Entries Manning Manufacturing Inc. had the following items that require adjustment at year end. Salaries of $5,320 that were earned in December are unrecorded and unpaid. Used $1,970 Of utilities in December, which are unrecorded and unpaid. Interest of $925 on a note payable has not been or paid. Required: Prepare the adjusting entries needed at December 31. What is the effect on the financial statements if these adjusting entries are not made?