HVG, LLC paid $12,000 of cash to a real estate company upon signing a lease on 31 December 2005. Th e payment represents a $4,000 security deposit and $4,000 of rent for each of January 2006 and February 2006. Assuming that the correct accounting is to refl ect both January and February rent as prepaid, the most likely eff ect on HVG’s accounting equation in December 2005 is: B . a decrease in assets of $8,000.
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HVG, LLC paid $12,000 of cash to a real estate company upon signing a lease on 31 December 2005. Th e payment represents a $4,000 security deposit and $4,000 of rent for each of January 2006 and February 2006. Assuming that the correct accounting is to refl ect both January and February rent as prepaid, the most likely eff ect on HVG’s accounting equation in December 2005 is: B . a decrease in assets of $8,000.
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- Following is the unadjusted trial balance for Pens Unlimited on December 31, 2017. You are also given the following supplemental information: A pending lawsuit, claiming $4,200 in damages, is considered likely to favor the plaintiff and can be reasonably estimated. Pens Unlimited believes a customer may win a lawsuit for $5,000 in damages, but the outcome is only reasonably possible to occur. Pens Unlimited records warranty estimates on the basis of 2% of annual sales revenue. A. Using the unadjusted trial balance and supplemental information for Pens Unlimited, construct an income statement for the year ended December 31, 2017. Pay particular attention to expenses resulting from contingencies. B. Construct a balance sheet, for December 31, 2017, from the given unadjusted trial balance, supplemental information, and income statement for Pens Unlimited. Pay particular attention to contingent liabilities. C. Prepare any necessary contingent liability note disclosures for Pens Unlimited. Only give one to three sentences for each contingency note disclosure.On March 1, the Applewood Corporation wanted to purchase a $475,000 piece of equipment, but Applewood was only able to furnish $161,500 of its own cash to purchase the equipment. Applewood borrowed the remainder of the $475,000 from the People’s National Bank on a 2-year, 5.5% note. Required: If the company keeps its records on a calendar year, what adjusting entry should Applewood make on December 31? If an amount box does not require an entry, leave it blank. When required, round your answers to the nearest dollar. Dec. 31 fill in the blank 2 fill in the blank 3 fill in the blank 5 fill in the blank 6 (Record accrued interest expense)Illustrated below is the Trial Balance for Eirfan Sdn Bhd as at 31 December 2007. Other information: For the year 2007, the company board of directors declared that they will pay RM50,000 bonuses for their employees. Insurance charges were paid on 1/7/2007 for one year coverage. Provision for warranty was based on 3% of the year sales. The last year provision has not been changed. Provision for doubtful debts was based on 2% of the accounts receivable amount. The last year provision has not been changed as well. Interest charges of 8% per annum for the last quarter of the year have not been recorded. Interest is normally paid in January. Depreciation charges are at 10% per annum on straight line basis. As the Company accountant you are required to: a) Raise the journals for the additional information that are given in the above question. b) Raise the amended trial balance as at 31 December 2007
- BT21 Call Company has the following selected accounts with unadjusted balances at the end of 2021 as follows:· Rent Revenue – P12,000· Unearned Rent Revenue – P6,000Two (2) transactions were entered into by the company during the year with its operating lessors as follows:· Paid rent to BTS Corp, P120,000. The amount was credited to a nominal account.· Another rent was paid to BigHit Company, P60,000. At the end of the accounting period, it was determined that unearned rent totaled P45,000 and the auditors concur based on examination made in accordance with PFRS and PSA. Which of the following statements is correct? A. An adjusting entry pertaining to the above transactions would require a debit of P45,000 to rent revenue. B. No adjustment is necessary. C. An adjusting entry is required to increase rent revenue by P120,000. D. An adjusting entry would require a credit to unearned rent of P39,000.Iris Company operates a retail store and must determine the proper December 31, 2014 year-end accrual for the following expenses: • The store lease calls for fixed rent of P12,000 per month payable at the beginning of the month, payable at the beginning of the month, and additional rent equal to 6% of net sales over P2,500,000 per calendar year, payable on January 31 of the following year. Net sales for 2013 are P4,500,000• An electric bill of P8,500 covering the period December 16, 2014 through January 15, 2015 was received January 22, 2015.• A P4,000 telephone bill was received January 7, 2015, covering:Service in advance for January 2015................. P1,500Local and toll calls for December 2014............ P 2,500 In its December 31, 2014 statement of financial position, Iris should report accrued liabilities of: A. 150,750 B. 131,000 C. 128,250 D. 126,750On October 1, 2024, Microchip lent $99,000 to another company. A note was signed with principal and 10% interest to be paid on September 30, 2025. On November 1, 2024, the company paid its landlord $12,000 representing rent for the months of November through January. Prepaid rent was debited at the time of payment. On August 1, 2024, collected $18,000 in advance rent from another company that is renting a portion of Microchip’s factory. The $18,000 represents one year’s rent and the entire amount was credited to deferred rent revenue at the time cash was received. Depreciation on office equipment is $6,500 for the year. Vacation pay for the year that had been earned by employees but not paid to them or recorded is $10,000. The company records vacation pay as salaries expense. Microchip began the year with $4,000 in its asset account, supplies. During the year, $8,500 in supplies were purchased and debited to supplies. At year-end, supplies costing $4,250 remain on hand. Required:…
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- Marin Ltd. started the year with a balance owing from Stratford Inc. of $31,200. After several phone calls, on Feb. 1, 2025, Stratford offered to sign a 5% note for the balance owing. The note is due May 1, 2025. Marin has a calendar year end and adjusts its accounts monthly. On May 5, Marin Ltd. was notified that Stratford Inc. went bankrupt and would not be paying off its debts.Required: Prepare all journal entries and month-end adjusting entries from Feb. 1, 2025 to May 5, 2025 for Marin Ltd.East Corp. manufactures stereo systems that carry a two-year warranty against defects. Based on past experience, warranty costs are estimated at 4% of sales for the warranty period.During 2005, stereo system sales totaled $3,000,000, and warranty costs of $67,500 were incurred.In its income statement for the year ended December 31, 2005, East should report warranty expense of: $67,500 $120,000 $60,000 $52,500 wance as a part of stockholders' equity. In the income statement.ABD Company pays a weekly payroll of $285,000 that includes federal taxes withheld of $38,100, FICA taxes withheld of $23,670, and 401(k) withholdings of $27,000. (Although not required, preparing journal entries may help you answer questions 1A- What is the effect of assets from the transaction(s)? TWO ANSWERS REQUIRED - (Increase or decrease and $ how much) 1B- What is the effect of liabilities from the transaction(s)? TWO ANSWERS REQUIRED - (Increase or decrease and $ how much)