n December 31, 2021, Sad Inc. had a P3,000,000 balance in advertising expense account before any year-end adjustments. Radio and television advertising spots broadcast during December 2021 were billed to Happy on January 5, 2022. The invoice cost of P400,000 was paid on January 20, 2022. Included in the P3,000,000 is P600,000 for newspaper advertising for January 2022 sales promotional campaign. How much is prepaid newspaper advertising as of December 31, 2021? a. 400,000 b. 600,000 c. 200,000 d. 300,000

n December 31, 2021, Sad Inc. had a P3,000,000 balance in advertising expense account before any year-end adjustments. Radio and television advertising spots broadcast during December 2021 were billed to Happy on January 5, 2022. The invoice cost of P400,000 was paid on January 20, 2022. Included in the P3,000,000 is P600,000 for newspaper advertising for January 2022 sales promotional campaign. How much is prepaid newspaper advertising as of December 31, 2021? a. 400,000 b. 600,000 c. 200,000 d. 300,000

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

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 1MC: The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before...

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The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000
In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in December 2019 and a cash payment of S4,500 for services to be performed in January 2020. Swanstrom also receives the December utility bill for S600 but does not pay this bill until 2020. For 2019, under the accrual basis of accounting, Swanstrom would recognize: a. $8,000 of revenue and $600 of expense. b. $8,000 of revenue and $0 of expense. c. $3,500 of revenue and $600 of expense. d. $3,500 Of revenue and $0 of expense.
Service Revenue Softball Magazine Company received advance payments of $75,000 from customers during 2019. At December 31, 2019, $20,000 of the advance payments still had not been earned. Required: After the adjustments are recorded and posted at December 31, 2019, calculate what the balances will be in the Unearned Magazine Revenue and Magazine Revenue accounts. Use the following information for Cornerstone Exercises 5-23 and 5-24: Bolton sold a customer service contract with a price of S37 000 to Sammys Wholesale Company. Bolton offered terms of 1/10, n/30 and expects Sammy to pay within the discount period.
Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that it will owe 17,400 in property taxes for the year. On June 1, its property taxes are assessed at 17,000, which it pays immediately. Prepare the related journal entries for April 1, May 1, and June 1. Then compute the monthly property tax expense that Cee Co. would record during June through March.
JustKitchens Inc. provides services to restaurants and hotels. The company supplies paper products, tableware, cookware, restaurant and kitchen equipment, and cleaning supplies. On January 2, 2019, Just-Kitchens enters into a contract with a local restaurant chain to provide its services for 3 years at a cost of 10,000 per year. The restaurant chain pays the total contract fee on January 2, 2019. JustKitchenss stand-alone selling price is also 10,000 per year. After 2 years, the restaurant asks to modify the contract. On January 2, 2021, the companies agree to reduce the fee for the third year to 9,000 in exchange for extending the contract for 2 additional years at a fee of 11,000 per year. This modification is agreed to by both parties, and on that date the restaurant chain pays for the additional 2 years of service. The 11,000 fee for the additional years is the same as JustKitchenss stand-alone price. Required: 1. How should JustKitchens account for the contract modification? 2. Prepare the journal entry that JustKitchens would make over the life of the contract.
Unearned Revenue Jennifers Landscaping Services signed a $400-per-month contract on November 1, 2019, to provide plant watering services for Lola Inc.s office buildings. Jennifers received 4 months' service fees in advance on signing the contract. Required: 1. Prepare Jennifers journal entry to record the cash receipt for the first 4 months. 2. Prepare Jennifers adjusting entry at December 31, 2019. 3. CONCEPTUAL CONNECTION How would the advance payment (account(s) and amounts(s)] be reported in Jennifers December 31, 2019, balance sheet? How would the advance payment [account(s) and amount(s)] be reported in Lolas December 31, 2019, balance sheet?
At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.
On December 31, 2021, Sad Inc. had a P3,000,000 balance in advertising expense account before any year-end adjustments. Radio and television advertising spots broadcast during December 2021 were billed to Happy on January 5, 2022. The invoice cost of P400,000 was paid on January 20, 2022. Included in the P3,000,000 is P600,000 for newspaper advertising for January 2022 sales promotional campaign. What amount should be reported as advertising expense for 2021?A. 1,400,000B. 1,500,000C. 2,800,000D. 1,700,000
On September 1, 2021, Time Magazine received $240,000 for six month subscriptions covering the period October 1, 2021 through March 30,2022. Time faithfully fulfilled its responsibilities to tis customers in October and November. When Time prepares its balance sheet for November 30, 2021, what balance should the copmany reprot for unearned revenue? A. $120,000 B. $80,000 C. $160,000 D. $0
Dexter Company is preparing its financial statement for the year ended December 31, 2020. Accounts Payable amounted to P 1,200,000 before any necessary year-end adjustments related to the following: • At December 31, 2020, Dexter Company has P200,000 debit balance in its accounts payable to DEF, a supplier, resulting from a P 200,000 advance payment for goods to be manufactured to Dexter's specifications. . Checks in the amount of P300,000 were written to vendors and recorded on December 29, 2020. The checks were picked up on January 5, 2021 • Checks in the amount of P 150,000 were written to vendors and recorded on December 30, 2020. The checks were received by the vendors on December 31, 2020. What amount should Dexter Company report as accounts payable in its December 31, 2019 balance sheet?
TDC Company is preparing its financial statement for the year ended December 31, 2020. Accounts Payable amounted to P 1,200,000 before any necessary year-end adjustments related to the following:• At December 31, 2020, ABC Company has P200,000 debit balance in its accounts payable to DEF, a supplier, resulting from a P 200,000 advance payment for goods to be manufactured to ABC's specifications.• Checks in the amount of P300,000 were written to vendors and recorded on December 29, 2020. The checks were picked up on January 5, 2021.• Checks in the amount of P 150,000 were written to vendors and recorded on December 30, 2020. The checks were received by the vendors on December 31, 2020.What amount should ABC Company report as accounts payable in its December 31, 2019 balance sheet?
Pythagoras Company must determine the December 31, 2021 year-end accruals for advertising and rent expenses. A P2,000 advertising bill was received on January 7, 2022. It related to costs of P1,500 for advertisements in December 2021 issues and P500 for advertisements in January 2, 2022 issues of the newspaper. A store lease effective December 16, 2020 calls for fixed rent of P4,800 per month payable 1 month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P1,200,000 per calendar year is payable on January 31 of the following year. Net sales for 2021 and 2020 were P2,200,000 and P1,500,000 respectively. In its December 31, 2021 statement of financial position, Pythagoras should report accrued liabilities of: