Key Insurance Agency was organized on October 1, 2015. Assume that the aare closed and financial statements prepared each month. The company occupies rented officeMax Wayer Meat Packing, Inc.Has recently accepted a donation of land with a fairPacking promises to build a packing plant in Memphis. Recird the entry for Max Wayer's.value of $150,000 from the MemphisIndustrial Development Corp. In return Max Wayer Meatacquisition, October 1. The trial balance for Key Insurance Agency at December 31 is shownspace but owns office equipment estimated to have a useful life of 10 years from date ofPART II: WORK OUTProblem .1Key Insurance Agency was organizedaccountson October 1, 2015. Assume that theare closed and financial statements prepared each month. The company occupies rented officeSpace but owns office equipment estimated to have a useful life of I0 years from date ofacquisition, October 1. The trial balance for Key Insurance Agency at December 31 is shownbelow.Cash$22,565Accounts Receivables7.050Office Equipment9,600Accumulated Depreciation: Office Equipment160Accounts Payable2,260Income Taxes Payable4,965Capital Stock20,000Retained Earnings7,450Dividends2,500Commissions Earned31,080Advertising Expense2,400Salaries Expense18,000Rent Expense3,800Totals$65,915 S65,915Instructions:a. Prepare the adjusting entry to record depreciation of the office equipment for the month ofDecember, using the straight line method of computing depreciation expense.b. Compute Taxable income for December – assume this is the same as "Income before incometaxes." Using a corporate income tax rate of 40%, prepare the adjusting entry to accrue KeyInsurance Agency's income taxes for the month of December 31, 2015.c. Prepare an adjusted trial balance at December 31, 2015.d. Prepare an income statement and a statement of retained earnings for the month ended December31, 2015, and a balance sheet in report form at December 31, 2015Problem .2Max Wayer Meat Packing, Inc.Has recently accepted a donation of land with a fairvalue of $150,000 from the Memphislndustrial Development Corp. In return Max Wayer MeatPacking promises to build a packing plant in Memphis. Recird the entry for Max Wayer's.Page | 2 d. Compute gross profit using the perpetual system.Problem .3 Presented below are transactions related to Guillen, Inc.+ May 10 Purchased goods billed at $20,000 subiect to cash discount terms of 2/10, n/60.+ 11 Purchased goods billed at $15,000 subject to terms of 1/15, n/30.+ 19 Paid invoice of May 10.+ 24 Purchased goods billed at $11,500 subject to cash discount terms of 2/10, n/30.Instructions(a) Prepare general journal entries for the transactions above under the assumption that purchases areto be recorded at net amounts after cash discounts and that discounts lost are to be treated as financialexpense.(b) Assuming no purchase or payment transactions other than those given above, prepare theadjusting entry required on May 31 if financial statements are to be prepared as of that date.Problem .4Chippewas Company sells one product. Presented below isinformation for January forChippewas Company.+ Jan. 1 Inventory 100 units at $6 each+ 4 Sale 80 units at $8 each+ 11 Purchase 150 units at $6.50 each+ 13 Sale 120 units at $8.75 each+ 20 Purchase 160 units at $7 each+ 27 Sale 100 units at $9 eachInstructions: Chippewas uses the FIF0 cost flow assumption. All purchases and sales are onaccount.a. Assume Chippewas uses a periodic system. Prepare all necessary journal entries, includingtheend-of-month closing entry to record cost of goods sold. A physical count indicates that theending inventory for January is 110 units.b. Compute gross profit using the periodic system.c. Assume Chippewas uses a perpetual system. Prepare all necessary journal entries.Problem .5Problem .6 On January 2, 2012 Man & Drake Company buys Office Equipment on account fromPrince Company, $2,450.aProblem .7aPage | 3

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Problem .3 Presented below are transactions related to Guillen, Inc. + May 10 Purchased goods billed at $20,000 subiect to cash discount terms of 2//10, n/60. + 11 Purchased goods billed at $15,000 subject to terms of 1/15, n/30. + 19 Paid invoice of May 10. +24 Purchased goods billed at $11,500 subject to cash discount terms of 2/10, n/30. Instructions (a) Prepare general journal entries for the transactions above under the assumption that purchases are to be recorded at net amounts after cash discounts and that discounts lost are to be treated as financial expense. (b) Assuming no purchase or payment transactions other than those given above, prepare the adjusting entry required on May 31 if financial statements are to be prepared as of that date.

Problem .3 Presented below are transactions related to Guillen, Inc. + May 10 Purchased goods billed at $20,000 subiect to cash discount terms of 2//10, n/60. + 11 Purchased goods billed at $15,000 subject to terms of 1/15, n/30. + 19 Paid invoice of May 10. +24 Purchased goods billed at $11,500 subject to cash discount terms of 2/10, n/30. Instructions (a) Prepare general journal entries for the transactions above under the assumption that purchases are to be recorded at net amounts after cash discounts and that discounts lost are to be treated as financial expense. (b) Assuming no purchase or payment transactions other than those given above, prepare the adjusting entry required on May 31 if financial statements are to be prepared as of that date.

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter21: Accounting For Accruals, Deferrals, And Reversing Entries

Section: Chapter Questions

Problem 2AP

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On October 1, 2019, Jay Pryor established an interior decorating business, Pioneer Designs. During the month, Jay completed the following transactions related to the business: Oct. 1. Jay transferred cash from a personal bank account to an account to be used for the business, 18,000. 4.Paid rent for period of October 4 to end of month, 3,000. 10.Purchased a used truck for 23,750, paying 3,750 cash and giving a note payable for the remainder. 13.Purchased equipment on account, 10,500. 14.Purchased supplies for cash, 2,100. 15.Paid annual premiums on property and casualty insurance, 3,600. 15.Received cash for job completed, 8,950. Enter the following transactions on Page 2 of the two-column journal: 21.Paid creditor a portion of the amount owed for equipment purchased on October 13, 2,000. 24.Recorded jobs completed on account and sent invoices to customers, 14,150. 26.Received an invoice for truck expenses, to be paid in November, 700. 27.Paid utilities expense, 2,240. 27.Paid miscellaneous expenses, 1,100. Oct. 29. Received cash from customers on account, 7,600. 30.Paid wages of employees, 4,800. 31.Withdrew cash for personal use, 3,500. Instructions 1. Journalize each transaction in a two-column journal beginning on Page 1, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted. 2. Post the journal to a ledger of four-column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted. 3. Prepare an unadjusted trial balance for Pioneer Designs as of October 31, 2019. 4. Determine the excess of revenues over expenses for October. 5. Can you think of any reason why the amount determined in (4) might not be the net income for October?
For each of the following situations write the principle, assumption, or concept that justifies or explains what occurred. A. A landscaper received a customers order and cash prepayment to install sod at a house that would not be ready for installation until March of next year. The owner should record the revenue from the customer order in March of next year, not in December of this year. B. A company divides its income statements into four quarters for the year. C. Land is purchased for $205,000 cash; the land is reported on the balance sheet of the purchaser at $205,000. D. Brandys Flower Shop is forecasting its balance sheet for the next five years. E. When preparing financials for a company, the owner makes sure that the expense transactions are kept separate from expenses of the other company that he owns. F. A company records the expenses incurred to generate the revenues reported.
The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the businesss operations: July 1.Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Musics checking account. 1.Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music store. Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2.Received 1,000 cash from customers on account. 3.On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 250 to creditors on account. 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart, 7,500. 8.Paid for a newspaper advertisement, 200. 11.Received 1,000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment. 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27.Paid electric bill, 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists music during July. 31.Withdrew 1,250 cash from PS Music for personal use. PS Musics chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: Instructions 1. Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 2019.
The transactions completed by PS Music during June 2019 were described at the end of Chapter 1. The following transactions were completed during July, the second month of the business's operations: July 1. Peyton Smith made an additional investment in PS Music by depositing 5,000 in PS Music's checking account. 1. Instead of continuing to share office space with a local real estate agency, Peyton decided to rent office space near a local music: store. Paid rent for July, 1,750. 1. Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period. 2. Received 1,000 cash from customers on account. 3. On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for SO hours per month for a monthly fee of 3,600. Any additional hours beyond SO will be billed to KXMD at 40 per hour. In accordance with the contract, Peyton received 7,200 from KXMD as an advance payment for the first two months. 3. Paid 250 to creditors on account. 4. Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5. Purchased office equipment on account from Office Mart, 7,500. 8. Paid for a newspaper advertisement, 200. 11. Received 1,000 for serving as a disc jockey for a party. 13. Paid 700 to a local audio electronics store for rental of digital recording equipment. 11. Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Page 2 of the two-column journal: 16. Received 2,000 for serving as a disc jockey for a wedding reception. 18. Purchased supplies on account, 850. July 21. Paid 620 to Upload Music for use of its current music demos in making various music sets. 22. Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23. Served as disc jockey for a party for 2,500. Received 750, with the remainder due August 4, 2019. 27. Paid electric bill, 915. 28. Paid wages of 1,200 to receptionist and part-time assistant. 29. Paid miscellaneous expenses, 540. 30. Served as a disc jockey for a charity ball for 1,500. Received 500, with the remainder due on August 9, 2019. 31. Received 3,000 for serving as a disc jockey for a party. 31. Paid 1,400 royalties (music expense) to National Music Clearing for use of various artists' music during July. 31. Withdrew l,250 cash from PS Music for personal use. PS Music's chart of accounts and the balance of accounts as of July 1, 2019 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts receivable 1,000 14 Supplies 170 15 Prepaid insurance 17 Office Equipment 21 Accounts payable 250 23 Unearned Revenue 31 Peyton smith, Drawing 4,000 32 Fees Earned 500 41 Wages Expense 6,200 50 Office Rent Expense 400 51 Equipment Rent Expense 800 52 Utilities Expense 675 53 Supplies Expense 300 54 music Expense 1,590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1.Enter the July 1, 2019, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2.Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3.Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4.Prepare an unadjusted trial balance as of July 31, 2019.
Which of the following events would be recognized in the accounting records of Progusto Consultants on the date indicated? Explain your answer. Feb. 15 : Progusto Consultants offers to purchase a piece of land for $1,200,000. There is a high likelihood that the offer will be accepted. March 2 : Progusto Consultants recieved notice that its rentals for their office will increase from $40,000 to $45,000 per month starting May 1. April 29 : The Business recieves its electricity bill for the month of April. The bill is due to May 5. July 5 : Progusto places an order for an office equipment costing $85,000 Aug. 6 : The office equipment ordered on July 5 is delivered. Payment will be due on Sept. 1 Sep. 5 : The business hired a new office clerk.
john began an Upholstery cleaning business on October 1,2020 and engaged in the following transactions during the month: Began business by depositing 12,000 in a Clean & Premium ltd bank oct 1 : account oct 2 :Ordered Cleaning supplies 3,000 oct 3: Purchased cleaning equipment for 2,800. oct 4 : Made two months' van lease payment in advance, 1,200 Received the cleaning supplies ordered on (Oct 2) oct 7: and agreed to pay half the amount in 10 days, and the rest in 30 days oct 9: Paid for repairs on the van with cash, 1,080 oct 12 : Received cash for cleaning upholstery, 960. oct 17: Paid half the amount owed on supplies purchased on Oct 7, 1,500. oct 21 : Billed customers for cleaning upholstery, 1,340 oct 24 :Paid cash for additional repairs on the van, RM80 oct 27 : Received 600 from the customers billed on October 21. oct 31 Made a cash withdrawal of 700. you are Required to A : Prepare the general journal based on the above transactions. B:…
M4 Engineering began operations in January of 2020. M4 Engineering provides structural engineering services to local these parks. Listed below are some transaction from the first quarter of 2020. Prepare the Journal Entries, update T- accounts, and prepare the TB. A. On January 1, the owners deposited $200,000 into the business bank account in exchange for Common Stock. B. On January 2, M4 Engineering signed a 1-year lease for an office building in Long Beach. The owner required the rent for the year be paid in advance. M4 Engineering gave the landlord a check for $30,000. C. On January 5, M4 Engineering signed a $75,000 contract to provide engineering services beginning on April 1. D. On January 31, M4 Engineering bought $7,500 of office supplies on account. E. On February 10, M4 Engineering paid the utility bills of $300. F. On February 15, M4 Engineering bought computers and other Office Equipment on account for $20,000, G. On February 28, M4 Engineering received $50,000…
Apex Systems Co. Offers it's services to residents in the Seattle area. Selected accounts from the Ledger of Apex Systems Co. For the fiscal year ended in December 31,2019, are as follows: Bart Nesbit, Capital Dec.31 78,000 Jan. 1 (2019) 1,334,000 Dec.31 347,000 Bart Nesbit , Drawing Mar.31 19,500 Dec.31 78,000 June 30 19,500 Sept. 30 19,500 Dec.31 19,500 Required: Repair a statement of owners equity for the year. No additional investments were made during the year. if a net loss has been incurred or there has been a decrease in owner's equity, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading.
Bayoud has started a computer servicing center on May 1, 2021. Following are some events andtransactions that occurred in the month of May:May 1 Bayoud invested $7,000 cash in the business.3 Purchased $600 of supplies on account.5 Paid $125 to advertise in the County News.9 Received $4,000 cash for services performed.15 Received $5,400 for services to be performed in July.17 Paid $2,500 for employee salaries.20 Paid the one year’s rent in advance $1200.29 Purchased equipment for $4,200 on account.Instructions:Prepare the ledger for Cash account.
Bayoud has started a computer servicing center on May 1, 2021. Following are some events andtransactions that occurred in the month of May:May 1 Bayoud invested $7,000 cash in the business.3 Purchased $600 of supplies on account.5 Paid $125 to advertise in the County News.9 Received $4,000 cash for services performed.15 Received $5,400 for services to be performed in July.17 Paid $2,500 for employee salaries.20 Paid the one year’s rent in advance $1200.29 Purchased equipment for $4,200 on account.Instructions:(i) Show the tabular analysis of the above transactions. (ii) Give the necessary journals. (iii) Prepare the ledger for Cash account
Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. During the month, Knaus Architects completed the following transactions: A. Issued common stock to Marjorie Knaus in exchange for $30,000. B. Paid January rent for office and workroom, $2,500. C. Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder. D. Purchased office and computer equipment on account, $8,000. E. Paid cash for supplies, $2,100. F. Paid cash for annual insurance policies, $3,600. G. Received cash from client for plans delivered, $9,000. H. Paid cash for miscellaneous expenses, $2,600. I. Paid cash to creditors on account, $4,000. J. Paid installment due on note payable, $1,875. K. Received invoice for blueprint service, due in February, $5,500. L. Recorded fees earned on plans delivered, payment to be received in February, $31,400. M. Paid salary of assistants, $6,000. N. Paid gas, oil, and repairs on automobile for…
Marjorie Knaus, an architect, organized Knaus Architects on January 1, 2018. During the month, Knaus Architects completed the following transactions: A. Issued common stock to Marjorie Knaus in exchange for $30,000. B. Paid January rent for office and workroom, $2,500. C. Purchased used automobile for $28,500, paying $6,000 cash and giving a note payable for the remainder. D. Purchased office and computer equipment on account, $8,000. E. Paid cash for supplies, $2,100. F. Paid cash for annual insurance policies, $3,600. G. Received cash from client for plans delivered, $9,000. H. Paid cash for miscellaneous expenses, $2,600. I. Paid cash to creditors on account, $4,000. J. Paid installment due on note payable, $1,875. K. Received invoice for blueprint service, due in February, $5,500. L. Recorded fees earned on plans delivered, payment to be received in February, $31,400. M. Paid salary of assistants, $6,000. N. Paid gas, oil, and repairs on automobile for…