Question 3 The income statement of Fezzik's Shoe Repair is as follows: FEZZIK'S SHOE REPAIR Income Statement For the Month Ended April 30, 2019 Revenue Service Revenue $9,500 Expenses Salaries and Wages Expense Depreciation Expense Utilities Expense Rent Expense Supplies Expense Total Expenses $4,200 350 400 600 1,050 6,600 Net Income $2,900 On April 1, the Owner's Capital account had a balance of $12,900. During April, Fezzik withdrew $3,000 cash for personal use. Instructions Prepare closing entries at April 30

Question 3 The income statement of Fezzik's Shoe Repair is as follows: FEZZIK'S SHOE REPAIR Income Statement For the Month Ended April 30, 2019 Revenue Service Revenue $9,500 Expenses Salaries and Wages Expense Depreciation Expense Utilities Expense Rent Expense Supplies Expense Total Expenses $4,200 350 400 600 1,050 6,600 Net Income $2,900 On April 1, the Owner's Capital account had a balance of $12,900. During April, Fezzik withdrew $3,000 cash for personal use. Instructions Prepare closing entries at April 30

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter1: Introduction To Accounting And Business

Section: Chapter Questions

Problem 1.19EX

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Expense Adjustments Faraday Electronic Service repairs stereos and DVD players. During 2019, Faraday engaged in the following activities: On September 1, Faraday paid Wausau Insurance $4,860 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance. At December 31, Faraday estimates that $1,520 of utility costs are unrecorded and unpaid. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $1,440 is unpaid and unrecorded at December 31. In late October, Faraday agreed to become the sponsor for the sports segment of the evening news program on a local television station. The station billed Faraday $4,350 for 3 months' sponsorship-November 2019, December 2019, and January 2020-in advance. When these payments were made, Faraday debited prepaid advertising. At December 31, 2 months' advertising has been and I month remains unused. Required: Prepare adjusting entries at December 31 for these four activities. CONCEPTUAL CONNECTION What would be the effect on expenses if the adjusting entries were not made?
Balance sheets, net income Financial information related to the proprietorship of Ebony Interiors for February and March 2019 is as follows: February 29, 2019 March 31, 2019 Accounts payable 310,000 400,000 Accounts receivable 800,000 960,000 Cash 320,000 380,000 Justin Berk, capital ? ? Supplies 30,000 35,000 a. Prepare balance sheets for Ebony Interiors as of February 29 and March 31, 2019. b. Determine the amount of net income for March, assuming that the owner made no additional investments or withdrawals during the month. c. Determine the amount of net income for March, assuming that the owner made no additional investments but withdrew 50,000 during the month.
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.
Exercise 3-50 Prepayment of Expenses JDM Inc. made the following prepayments for expense items during 2019: Prepaid building rent for I year on April I by paying $6,600. Prepaid rent was debited for the amount paid. Prepaid 12 months' insurance on I by paying Prepaid insurance was debited. Purchased $5,250 of office supplies on 15, debiting supplies for the full amount. There were no office supplies on hand as of October 15. Office supplies costing $1,085 remain unused at December 3 1, 2019. Paid $600 for a 12-month service contract for repairs and maintenance on a computer. The contract begins November 1. The full amount of the payment was debited to prepaid repairs and maintenance.
Exercise 2-38 Events and Transactions The following economic events related to K the bill need not be paid until March 1, 2019. On February, 15, Kqualify and does not qualify. indicate whether each of the above events would qualify as a transaction and be recognized and recorded in the accounting system on the date indicated. 2. CONCEPTUAL CONNECTION For any events that did not qualify as a transaction to be recognized and recorded, explain why it does not qualify.
Case 2-68 Accounting for Partially Completed Events: 3 Prelude to Chapter 3 Ehrlich Smith. the owner of The Shoe Bone has asked you to help him understand the proper way to account for certain accounting items as he prepares his 2019 financial statements. Smith has provided the following information and observations: (Continued) a. A 3-year fire insurance policy was purchased on 2019, for $2,400. Smith believes that a part of the cost of the insurance policy should be allocated to each period that benefits from its coverage. b. The store building was purchased for 580,000 in January 2011. Smith expected then (as he does now) that the building will be serviceable as a shoe store for 20 years from the date of purchase. In 2011, Smith estimated that he could sell the property for $6,000 at the end of its serviceable life. He feels that each period should bear some portion of the cost of this long-lived asset that is slowly being consumed. c. The Shoe Box borrowed 520300 on a 1-year, 8% note that is due on September 1 next year) Smith notes that $21,600 cash will be required to repay the note at maturity. The $1,600 difference is, he feels, a cost of using the loaned funds and should be spread over the periods that benefit from the use of' the loan funds; Required: Explain what Smith is trying to accomplish with the three items. Are his objectives supported by the concepts that underlie accounting?
Problem 2-593 Journalizing Transactions Monilast Chemicals engaged in the following transactions during December 2019: Dec 2 Paid rent on office furniture, $1,200. 3 Borrowed $25,030 on a 9-month, 3% note. 7 Provided services on credit. $42,600. 10 Purchased supplies on credit, $2,850. 13 Collected accounts receivable, $20,150. 19 Issued common stock, $50000. 22 Paid employee wages for December. $13,825. 23 Paid accounts payable, $1,280. 25 Provided services for cash, $13,500. 30 Paid utility bills for December, $1,975. Required: Prepare a journal entry for each transaction.
Balance sheet Using the following data for Adventure Travel Service as well as the statement of owner's equity shown in Practice Exercise 15A, prepare a report form balance sheet as of April 30, 2019: Accounts payable 105,000 Accounts receivable 485,000 Cash 197,000 Land 900,000 supplies 18,000
Exercise 3-51 Adjustment for Supplies The downtown location of Chicago Clothiers purchases large quantities Of supplies, including plastic garment bags and paper bags and boxes. At December 31, 2019, the following information is available concerning these supplies: Supplies inventory, 1/1/2019 $4,150 Supplies inventory, 12/31/2019 5,220 Supplies purchased for cash during 2019 12,690 All purchases of supplies during the year are debited to the supplies inventory. Required: What is the expense reported on the income statement associated with the use of supplies during 2019? What is the adjusting entry at December 31, 2019? By how much would assets and income be overstated or understated if the adjusting entry were not recorded?
Brief Exercise 3-32 Adjusting Entries-Deferrals Tyndal Company had the following items that required adjustment at December 31, 2019. Purchased equipment for $40,000 on January 1, 2019. Tyndal estimates annual depreciation to be $3,100. Paid $2,400 for a 2-year insurance policy on July 1, 2019. The amount was debited to Pre-paid Insurance when paid. Collected $1,200 rent for the period December 1, 2019 to March 30, 2020. The amount was credited to Unearned Service Revenue when received. 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?
Exercise 3-61 Preparation of a Worksheet (Appendix 3A) Unadjusted account balances at December 31, 2019, for Rapisarda Company are as follows: The following data are not yet recorded: Depreciation on the equipment is $18,350. Unrecorded wages owed at December 31 , 2019: $4,680. Prepaid rent at December 3 1 , 2019: $9,240. Income taxes expense: $5,463. Required: Prepare a completed worksheet for Rapisarda Company.
Brief Exercise 3-33 Preparing an Income Statement The adjusted trial balance of Pelton Company at December 31, 2019, includes the following accounts: Wages Expense, $22,400; Service Revenue. Rent Expense, $3,200; Dividends, $4,000; Retained Earnings, $12,200; and Prepaid Rent, $1,000. Required: Prepare a single-step income Statement for Pelton for 2019.