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u1 EXERCISE 4.7 Preparing Various g Adjusting Entries Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2009: A bank loan had been obtained on December 1. Accrued interest on the loan at Dccember 31 amounts to $1,200. No interest expense has yet been recorded. 1. 2. Depreciation of the firm's office building is based on an estimated life of 25 years. The build- ing was purchased in 2005 for $330,000. 3. Accrued, but unbilled, revenue during December amounts to $64,000. 17 On March 1, the firm pnid $1,800 to renew a 12-month insurance policy. The entire amount Wns recorded as Prepaid Insurnnce. 5. 4. The firm reccived $14,0XXI from King Biscuit Conpany in advance of developing : six-nionth marketing canpaign. The entire anount was initially recorded as Unearned Revenue. At December 31, $3,500 had actually been earned by the firm. The company's policy is to pay its employees cvery Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400. Record the necessary adjusting journal entries on December 31, 2009. 6. a. By how much did Sweeney & Associates's net incomc increase or decrease as a result of the Bdiusting entrics performed in part a? (Ignore income taxes.) b.

u1 EXERCISE 4.7 Preparing Various g Adjusting Entries Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2009: A bank loan had been obtained on December 1. Accrued interest on the loan at Dccember 31 amounts to $1,200. No interest expense has yet been recorded. 1. 2. Depreciation of the firm's office building is based on an estimated life of 25 years. The build- ing was purchased in 2005 for $330,000. 3. Accrued, but unbilled, revenue during December amounts to $64,000. 17 On March 1, the firm pnid $1,800 to renew a 12-month insurance policy. The entire amount Wns recorded as Prepaid Insurnnce. 5. 4. The firm reccived $14,0XXI from King Biscuit Conpany in advance of developing : six-nionth marketing canpaign. The entire anount was initially recorded as Unearned Revenue. At December 31, $3,500 had actually been earned by the firm. The company's policy is to pay its employees cvery Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400. Record the necessary adjusting journal entries on December 31, 2009. 6. a. By how much did Sweeney & Associates's net incomc increase or decrease as a result of the Bdiusting entrics performed in part a? (Ignore income taxes.) b.

Cornerstones of Financial Accounting
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 20CE: Cornerstone Exercise 3-20 Deferred Expense Adjusting Entries Best Company had the following items...
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1 EXERCISE 4.7 Preparing Various rough Adjusting Entries Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2009: 1. A bank loan had been obtained on December 1. Accrued interest on the loan at December 31 amounts to $1,200. No interest expense has yet been recorded. 2. Depreciation of the firm's office building is based on an estimated life of 25 years. The build- ing was purchased in 2005 for $330,000. Accrued, but unbilled, revenue during December amounts to $64,000. On March 1, the firm paid $ 1,800 to renew a 12-month insurance policy. The entire amount wns recorded as Prepaid Insuranco. The firm receival $14,(XXI from King Biscuit Company in advarce of developing : six-month marketing campaign. The entire anount was initially recorded as Unearned Revenue. At December 31, $3,500 had actually been earned by the firm. The company's policy is to pay its employces overy Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400. Record the necessary adjusting journal entries on December 31, 2009. b. By how much did Sweeney & Associates's net income increase or decrease as a result of the adjusting entrics performed in part a? (Ignore income taxes.) L17 3. 4. 6. a.
Transcribed Image Text:1 EXERCISE 4.7 Preparing Various rough Adjusting Entries Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2009: 1. A bank loan had been obtained on December 1. Accrued interest on the loan at December 31 amounts to $1,200. No interest expense has yet been recorded. 2. Depreciation of the firm's office building is based on an estimated life of 25 years. The build- ing was purchased in 2005 for $330,000. Accrued, but unbilled, revenue during December amounts to $64,000. On March 1, the firm paid $ 1,800 to renew a 12-month insurance policy. The entire amount wns recorded as Prepaid Insuranco. The firm receival $14,(XXI from King Biscuit Company in advarce of developing : six-month marketing campaign. The entire anount was initially recorded as Unearned Revenue. At December 31, $3,500 had actually been earned by the firm. The company's policy is to pay its employces overy Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400. Record the necessary adjusting journal entries on December 31, 2009. b. By how much did Sweeney & Associates's net income increase or decrease as a result of the adjusting entrics performed in part a? (Ignore income taxes.) L17 3. 4. 6. a.
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