Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 2, Problem 2.8P
• LO2–5
Excalibur Corporation sells video games for personal computers. The unadjusted
| Account Title | Debits | Credits |
| Cash | 23,300 | |
| 32,500 | ||
| Supplies | –0– | |
| Prepaid rent | –0– | |
| Inventory | 65,000 | |
| Office equipment | 75,000 | |
| 10,000 | ||
| Accounts payable | 26,100 | |
| Salaries and wages payable | 3,000 | |
| Note payable | 30,000 | |
| Common stock | 80,000 | |
| 16,050 | ||
| Sales revenue | 180,000 | |
| Cost of goods sold | 95,000 | |
| Interest expense | –0– | |
| Salaries and wages expense | 32,350 | |
| Rent expense | 14,000 | |
| Supplies expense | 2,000 | |
| Utility expense | 6,000 | |
| Totals | 345,150 | 345,150 |
Information necessary to prepare the year-end adjusting entries appears below.
1. The office equipment was purchased in 2016 and is being
2. Accrued salaries and wages at year-end should be $4,500.
3. The company borrowed $30,000 on September 1, 2018. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $500.
5. Prepaid rent at year-end should be $1,000.
Required:
Prepare the necessary December 31, 2018, adjusting entries.
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Question 4Young Traders is owned by Yvonne Young. Young Traders is not a VAT vendor and uses the perpetualinventory system. Goods are sold at a mark‐up of 50% on cost price. The following pre‐adjustment trialbalance appeared in the books of Young Traders at the end of their current financial year, 30 April 2020:Pre‐adjustment Trial Balance of Young Traders as at 30 April 2020Debit (R) Credit (R)Capital (1 May 2019) 1 200 000Vehicles 550 000Accumulated Depreciation on Vehicles (1 May 2019) 205 000Fixed deposit (ABBA Bank) (12% p.a.) 75 000Inventory 149 000Debtors Control 123 500Allowance for Credit Losses (1 May 2019) 2 500Creditors Control 50 100Bank 199 400Sales 1 467 500Cost of Sales 914 000Sales Returns 70 000Salaries and Wages 640 000Stationery 84 500Carriage on Sales 23 700Credit Losses 13 500Telephone 82 500R2 925 100 R2 925 10020 2020© The Independent Institute of Education (Pty) Ltd 2020Page 10 of 14Additional information and adjustments at year‐end:1. According to a physical…
P2
Prepare adjusting entries to reflect a through f.
a.The December 31 inventory count of computer supplies shows $620 still available.b.Three months have expired since the 12-month insurance premium was paid in advance.c.As of December 31, Lyn Addie has not been paid for four days of work at $125 per day.d.The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.e.The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.f. Three of the four months' prepaid rent have expired.
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
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