Part V. Unearned Revenue On November 1, Luna Repair Shop receives P80,000 from a customer as payment for the monthly check- up and maintenance of his automobiles for six months starting the month of November. Assuming no adjusting entry had been made on November 30, what is the adjusting journal entry to be prepared by the end of December if the company credited unearned service income on November 1 Date Particulars PR Debit Credit

Part V. Unearned Revenue On November 1, Luna Repair Shop receives P80,000 from a customer as payment for the monthly check- up and maintenance of his automobiles for six months starting the month of November. Assuming no adjusting entry had been made on November 30, what is the adjusting journal entry to be prepared by the end of December if the company credited unearned service income on November 1 Date Particulars PR Debit Credit

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter3: The Adjusting Process

Section: Chapter Questions

Problem 5BE: Adjustment for unearned revenue On June 1, 20Y2, Herbal Co. received 18,900 for the rent of land for...

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Rent Receivable Hudson Corp. has extra space in its warehouse and agrees to rent it out to Stillwater Company at the rate of $2,000 per month. The space was made available to Stillwater beginning on September 1. Under the terms of the agreement, Stillwater pays the months rent on the fifth day after the end of the month. Assume that Hudson prepares adjusting entries at the end of each month. Required How much revenue should Hudson record in September? How much revenue should Hudson record in October? Prepare the necessary entries on Hudsons books during the month of October.
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?
Customer Deposits Wolfe $ Wolfe collected $9,000 from a customer on April 1 and agreed to provide legal services during the next three months. Wolfe $ Wolfe expects to provide an equal amount of services each month. Required Prepare the journal entry for the receipt of the customer deposit on April 1. Prepare the adjusting entry on April 30. What will be the effect on net income for April if the entry in (2) is not recorded?
Office Supplies Somerville Corp. purchases office supplies once a month and prepares monthly financial statements. The asset account Office Supplies on Hand has a balance of $1,450 on May 1. Purchases of supplies during May amount to $1,100. Supplies on hand at May 31 amount to $920. Prepare the necessary adjusting entry on Somervilles books on May 31. What will be the effect on net income for May if this entry is not recorded?
EXPENSE METHOD OF ACCOUNTING FOR PREPAID EXPENSES Davidsons Food Mart paid 1,200 in advance to the local newspaper for advertisements that will appear monthly. The following entry was made: At the end of the year, December 31, 20--, Davidson received notification that advertisements costing 800 had been run. Prepare the adjusting entry.
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?
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 3-46 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.
Garcia Company rents out a portion of its building to Jerry Company for 1,000 per month. On August 1, Jerry paid Garcia 12,000 for 1 year of rent in advance. Prepare journal entries for Garcia to record the collection ofrent and the related year-end adjusting entry on December 31.
COMPLETION OF A WORK SHEET SHOWING A NET INCOME The trial balance for the Venice Beach Kite Shop, a business owned by Molly Young k shown on page 550. Year-end adjustment information is as follows: (a and b)Merchandise inventory costing 35,000 is on hand as of December .31, 20--. (The periodic inventory system is used.) (c)Supplies remaining at the end of the year, 3,300. (d)Unexpired insurance on December 31, S3,800. (e)Depreciation expense on the building foe 20--, 2,500. (f)Depreciation expense on the store equipment for 20--, 3,500. (g)Unearned rent revenue as of December 31, 4,00. (h)Wages earned but not paid as of December 31, 800. 1. Complete the Adjustments columns, identifying each adjustment with its corresponding letter. 2. Complete the work sheet. 3. Enter the adjustments m a general journal.
Appendix 2 Adjusting and reversing entries On the basis of the following data, (A) journalize the adjusting entries at December 31, the end of the current fiscal year, and (B) journalize the reversing entries on January 1, the first day of the following year: 1. Sales salaries are uniformly 11,750 for a five-day workweek, ending on Friday. The last payday of the year was Friday, December 26. 2. Accrued fees earned but not recorded at December 31, 51,300.
Assume that a lawyer bills her clients $15000 on June 30, for services rendered during June. The lawyer collects $8500 of the billings during July and the remainder in August. Under the accrual basis of accounting, when would the lawyer record the revenue for the fees? A. June, $15,000; July, $0; and August, $0 B. June, $0; July, $6,500; and August, $8,500 C. June, $8,500; July, $6,500; and August, $0 D. June, $0; July, $8,500; and August, $6,500