The company rented on November 1, 2020 a copying machine at P1.50/copy of production. Tt reported to have produced 400 copies as of December 31, 2020. No payment was made as of this date. 11) Paid an advertising to a radio station on December 1, 2020 for P4,500. The contract will commence upon payment on December 15, 2020 and will terminate on January 15, 2021. The payment was recorded using the Expense Method. 12) Office Supplies account showed a balance of P35,000 as of December 31, 2019. During the year, P10,000 worth of supplies were purchased, and on December 31, 2020, P9,400 were found to be on hand. 13) Of the P250,000 accounts receivable balance, the business estimated that P8,500 will be doubtful of collection. 14) Received a bill from Colight Co. for P3,500. The business plans to pay this amount next month. 15) Cash received of P15,500 for services rendered was credited to Accounts Receivable. The amount was also erroneously recorded at P1,550.

The company rented on November 1, 2020 a copying machine at P1.50/copy of production. Tt reported to have produced 400 copies as of December 31, 2020. No payment was made as of this date. 11) Paid an advertising to a radio station on December 1, 2020 for P4,500. The contract will commence upon payment on December 15, 2020 and will terminate on January 15, 2021. The payment was recorded using the Expense Method. 12) Office Supplies account showed a balance of P35,000 as of December 31, 2019. During the year, P10,000 worth of supplies were purchased, and on December 31, 2020, P9,400 were found to be on hand. 13) Of the P250,000 accounts receivable balance, the business estimated that P8,500 will be doubtful of collection. 14) Received a bill from Colight Co. for P3,500. The business plans to pay this amount next month. 15) Cash received of P15,500 for services rendered was credited to Accounts Receivable. The amount was also erroneously recorded at P1,550.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 2MCQ: In December 2019, Swanstrom Inc. receives a cash payment of $3,500 for services performed in...

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Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.
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
Worksheet Devlin Company has prepared the following partially completed worksheet for the year ended December 31, 2019: The following additional information is available: (a) salaries accrued but unpaid total 250; (b) the 80 heat and light bill for December has not been recorded or paid; (c) depreciation expense totals 810 on the buildings and equipment; (d) interest accrued on the note payable totals 380 (this will be paid when the note is repaid); (e) the company leases a portion of its floor space to KT Daniel Specialty Company for 50 per month, and KT Daniel has not yet paid its December rent; (f) interest accrued on the note receivable totals 80; (g) bad debts expense is 70; and (h) the income tax rate is 30% on current income and is payable in the first quarter of 2017. Required: 1. Complete the worksheet. (Round to the nearest dollar.) 2. Prepare the companys financial statements. 3. Prepare (a) adjusting and (b) closing entries in the general journal.
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.
Record the journal entry for each of the following transactions. Glow Industries purchases 750 strobe lights at $23 per light from a manufacturer on April 20. The terms of purchase are 10/15, n/40, invoice dated April 20. On April 22, Glow discovers 100 of the lights are the wrong model and is granted an allowance of $8 per light for the error. On April 30, Glow pays for the lights, less the allowance.
On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.
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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.
On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.