FINANCIAL ACCOUNTING>IC<
15th Edition
ISBN: 9781119344988
Author: Kimmel
Publisher: WILEY C
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Chapter 2, Problem 2.4IFRS
To determine
Accounting Standards: For uniformity and transparency, all the companies and business entities are required to maintain their accounting records under the frame work of rules and guidelines set by the Accounting standards setting bodies in consultation with the professional accountants and the business. The Financial Accounting Standards Board (FASB) issues accounting standards called as Generally Accepted Accounting Principles (GAAP) for Country U. On the other hand, the International Accounting Standards Board (IASB) issues accounting standards known as International Financial Reporting Standards (IFRS) for the countries other than Country U.
To prepare: A classified
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The following transactions occurred during December 31, 2021, for the Microchip Company.
On October 1, 2021, Microchip lent $90,000 to another company. A note was signed with principal and 8% interest to be paid on September 30, 2022.
On November 1, 2021, the company paid its landlord $6,000 representing rent for the months of November through January. Prepaid rent was debited.
On August 1, 2021, collected $12,000 in advance rent from another company that is renting a portion of Microchip’s factory. The $12,000 represents one year’s rent and the entire amount was credited to deferred rent revenue.
Depreciation on office equipment is $4,500 for the year.
Vacation pay for the year that had been earned by employees but not paid to them or recorded is $8,000. The company records vacation pay as salaries expense.
Microchip began the year with $2,000 in its asset account, supplies. During the year, $6,500 in supplies were purchased and debited to supplies. At year-end, supplies costing…
The Gloria Dimen Company presented the following information pertaining to accounts that will need adjustments for its November 30, 2021, year-end financial statements:
On October 1, 2021, Gloria Dimen Company paid P10,080 for 6 months' insurance premiums
The balance in the ledger account Office Supplies amounted to P32,000. A count of the office supplies on November 30,2021 totaled P12,800.
Gloria Dimen Company received P22,800 on November 1, 2021 from a customer for services to be rendered during the months of November, December, January, and February.
Gloria Dimen acquired Office Equipment costing P352,800 on April 1, 2021. The equipment is expected to last 5 years after which it will be worthless.
Assume that November 30, 2021 is a Friday and that Gloria Dimen pays its employees a total of P87,500 on Saturday.
The following information relates to the Blossom Magazine Company at the end of 2020. The accounting period is the calendar year.
1.
An insurance premium of $6,300 was paid on March 1, 2020, and was charged to Prepaid Insurance. The premium covers a 24-month period beginning March 1, 2020.
2.
On June 1, 2020, cash of $45,000 was received from subscribers (customers) for a 36-month subscription period beginning on that date. The receipt was recorded by a debit to Cash and a credit to Unearned Subscription Revenue.
3.
The Supplies account showed a balance of $3,500 at the beginning of 2020. Supplies costing $14,500 were purchased during 2020 and debited to the asset account. Supplies of $1,500 were on hand at December 31, 2020.
Using the information given above, prepare the necessary adjusting entries at December 31, 2020.
Chapter 2 Solutions
FINANCIAL ACCOUNTING>IC<
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