Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 3, Problem 19AE
1.
To determine
Record the adjustments then post them to T-accounts.
2.
To determine
Calculate each account’s adjusted balance.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
E3-21 Journalizing adjusting entries
Learning Objective 3
Consider the following situations:
Business receives $3,200 on January 1 for 10-month service contract for the period January 1 through October 31.
Total salaries for all employees is $3,600 per month. Employees are paid on the 1st and 15th of the month.
Work performed but not yet billed to customers for the month is $1,600.
The company pays interest on its $16,000, 4% note payable of $53 on the first day of each month.
Assume the company records adjusting entries monthly. Journalize the adjusting entries needed as of January 31.
(Learning Objective 5: Apply GAAP for uncollectible receivables) AtDecember 31, 2018, Concord Travel Agency has an Accounts Receivable balance of $87,000.Allowance for Uncollectible Accounts has a credit balance of $880 before the year-end adjustment. Service revenue (all on account) for 2018 was $800,000. Concord estimates that itsuncollectible-account expense for the year is 3% of service revenue. Make the year-end entryto record uncollectible-account expense. Show how Accounts Receivable and Allowance forUncollectible Accounts are reported on the balance sheet at December 31, 2018
S3-9. (Learning Objective 3: Adjust the accounts for interest expense) Trent Restaurantborrowed $110,000 on October 1 by signing a note payable to Hometown Bank. The interestexpense for each month is $825. The loan agreement requires Trent to pay interest on January 2for October, November, and December.1. Make Trent’s adjusting entry to accrue monthly interest expense at October 31, atNovember 30, and at December 31. Date each entry and include its explanation.2. Post all three entries to the Interest Payable account. You do not need to calculate thebalance of the account at the end of each month.3. Record the payment of three months’ interest on January 2.
Chapter 3 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 3 - If XYZ Consulting performs a consulting service,...Ch. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - What kind of account is accumulated depreciation?...Ch. 3 - Prob. 10DQ
Ch. 3 - Prob. 1SCCh. 3 - Adjusting the accounts is the process of a....Ch. 3 - Which of the following terms describes the types...Ch. 3 - Assume the weekly payroll of ASR, Inc., is 4,500....Ch. 3 - Prob. 5SCCh. 3 - Prob. 6SCCh. 3 - Prob. 7SCCh. 3 - What do closing entries accomplish? a. Bring the...Ch. 3 - Prob. 9SCCh. 3 - Which correctly represents the flow of information...Ch. 3 - Prob. 11SCCh. 3 - Prob. 12SCCh. 3 - Prob. 1SECh. 3 - Prob. 2SECh. 3 - Prob. 3SECh. 3 - Adjusting journal entryprepaid rent (Learning...Ch. 3 - Prob. 5SECh. 3 - Prob. 6SECh. 3 - Prob. 7SECh. 3 - Adjusting journal entrysalaries, accrued revenue,...Ch. 3 - Prob. 9SECh. 3 - Closing entries (Learning Objective 4) 5-10 min....Ch. 3 - Prob. 11SECh. 3 - Prob. 12SECh. 3 - Preparing a post-closing trial balance (Learning...Ch. 3 - Exercises (Group A) E3-14A. Adjusting journal...Ch. 3 - Adjusting journal entry-prepaid insurance...Ch. 3 - Common adjusting journal entries (Learning...Ch. 3 - Prob. 17AECh. 3 - Common adjusting journal entries (Learning...Ch. 3 - Prob. 19AECh. 3 - Prob. 20AECh. 3 - Prob. 21AECh. 3 - Prob. 22AECh. 3 - Preparing a financial statement (Learning...Ch. 3 - Prob. 24AECh. 3 - Prob. 25AECh. 3 - Prob. 26AECh. 3 - Prob. 27AECh. 3 - Prob. 28BECh. 3 - Prob. 29BECh. 3 - Prob. 30BECh. 3 - Analyzing errors (Learning Objective 2) 10-15 min....Ch. 3 - Common adjusting journal entries (Learning...Ch. 3 - Prob. 33BECh. 3 - Prob. 34BECh. 3 - Prob. 35BECh. 3 - Prob. 36BECh. 3 - Prob. 37BECh. 3 - Prob. 38BECh. 3 - Prob. 39BECh. 3 - Prob. 40BECh. 3 - Preparing closing entries (Learning Objective 4)...Ch. 3 - Problems (Group A) Common adjusting journal...Ch. 3 - Prob. 43APCh. 3 - Prob. 44APCh. 3 - Prob. 45APCh. 3 - Prob. 46APCh. 3 - Prob. 47APCh. 3 - Problems (Group B) Common adjusting journal...Ch. 3 - Re-creating adjusting journal entries from a trial...Ch. 3 - Preparing adjusting journal entries and an...Ch. 3 - Effects of adjusting journal entries on income...Ch. 3 - Preparing financial statements (Learning Objective...Ch. 3 - Preparing closing entries and a post-closing trial...Ch. 3 - This exercise continues the accounting process for...Ch. 3 - This problem continues the accounting process for...Ch. 3 - Prob. 1CFSAPCh. 3 - Prob. 1EIACh. 3 - Case 2. Brent Robertson and his banker were...Ch. 3 - Prob. 1FACh. 3 - Prob. 1IACh. 3 - Prob. 1SBACh. 3 - Written Communication You have received a letter...Ch. 3 - Journalizing, Posting, Adjusting, Preparing, and...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- S3-12. (Learning Objective 3: Adjust the accounts for prepaid rent) Due to the terms ofits lease, Hawke Services, Inc., pays the rent for its new office space in one annual payment of$26,800 on August 1, 2018. The lease covers the period of August 1, 2018, through July 31,2019. Hawke Services has a year-end of December 31. Assume that Hawke Services had noother prepaid rent transactions, nor did it have a Prepaid Rent beginning balance in 2018. Givethe journal entries that Hawke Services would make for (a) the annual rent payment of $26,800on August 1 and (b) the adjusting entry for rent expense on December 31, 2018. What is thebalance of Prepaid Rent at December 31, 2018?arrow_forwardS3-5. (Learning Objective 2: Apply the revenue and expense recognition principles)Identify the accounting concept or principle that gives the most direction on how to account foreach of the following situations:a. A utility bill is received on December 27 and will be paid next year. When should thecompany record utility expense?b. A physician performs a surgical operation and bills the patient’s insurance company. Itmay take three months to collect from the insurance company. Should the physicianrecord revenue now or wait until cash is collected?c. March has been a particularly slow month, and the business will have a net loss for thesecond quarter of the year. Management is considering not following its customarypractice of reporting quarterly earnings to the public.d. Salary expense of $48,000 is accrued at the end of the period to measure incomeproperly.e. A construction company is building a highway system, which will take four years.When should the company record the revenue it…arrow_forwardE3-24A. (Learning Objectives 3, 4: Adjust the accounts; construct the financial statements)The adjusted trial balances of Patterson Corporation at August 31, 2018, and August 31, 2017,include these amounts (in millions):2018 2017Accounts receivable............................................................... $430 $210Prepaid insurance .................................................................. 330 400Accrued liabilities payable (for other operating expenses) ..... 710 640Patterson Corporation completed these transactions (in millions) during the year endedAugust 31, 2018.Collections from customers......................................... $20,400Payment of prepaid insurance ..................................... 470Cash payments for other operating expenses............... 4,000Calculate the amount of sales revenue, insurance expense, and other operating expenses toreport on the income statement for the year ended August 31, 2018. Assume all sales are onaccount.arrow_forward
- E3-22A. (Learning Objectives 3, 4: Adjust the accounts for prepaid expenses; construct thefinancial statements) Dizzy Toys prepaid three years’ rent ($36,000) on January 1, 2018. AtDecember 31, 2018, Dizzy prepared a trial balance and then made the necessary adjusting entryat the end of the year. Dizzy adjusts its accounts once each year—on December 31.What amount appears for Prepaid Rent ona. Dizzy’s unadjusted trial balance at December 31, 2018?b. Dizzy’s adjusted trial balance at December 31, 2018?What amount appears for Rent Expense onc. Dizzy’s unadjusted trial balance at December 31, 2018?d. Dizzy’s adjusted trial balance at December 31, 2018?arrow_forwardE3-19A. (Learning Objectives 1, 3: Explain how accrual accounting differs from cash-basisaccounting; adjust the accounts) An accountant made the following adjustments atDecember 31, the end of the accounting period:a. Prepaid insurance, beginning, $500. Payments for insurance during the period, $2,000.Prepaid insurance, ending, $400.b. Interest revenue accrued, $2,500.c. Unearned service revenue, beginning, $1,700. Unearned service revenue, ending, $300.d. Depreciation on building, $5,600.e. Employees’ salaries owed for two days of a five-day work week; weekly payroll, $19,000.f. Income before income tax, $21,000. Income tax rate is 35%.Requirements1. Journalize the adjusting entries.2. Suppose the adjustments were not made. Calculate the overall overstatement or understatement of net income resulting from the omission of these adjustments.arrow_forward(Learning Objective 5: Construct and use a trial balance) The accounts of Specialty Deck Service, Inc., follow with their normal balances at April 30, 2018. The accounts arelisted in no particular order.Account BalanceDividends..........................Utilities expense ................Accounts receivable...........Delivery expense ...............$ 3,1002,3005,300700Retained earnings.............. 7,800Salary expense................... 8,400AccountCommon stock..................Accounts payable ..............Service revenue..................Equipment.........................Note payable.....................Cash..................................Balance$ 16,2004,30020,50030,80021,00019,200Requirements1. Prepare the company’s trial balance at April 30, 2018, listing accounts in proper sequence,as illustrated in the chapter. For example, Accounts Receivable comes before Equipment.List the expense with the largest balance first, the expense with the next largest balancesecond, and so on.2.…arrow_forward
- E1-25A. (Learning Objectives 3, 4: Apply the accounting equation; construct a balancesheet) The following are the assets and liabilities of Jill Carlson Realty Company, as ofJanuary 31, 2018. Also included are revenue, expense, and selected stockholders’ equity figuresfor the year ended on that date (amounts in millions):Total revenue .......................................Receivables...........................................Current liabilities .................................Common stock.....................................Interest expense....................................Salary and other employee expenses.....Long-term liabilities .............................$ 25.70.52.939.21.513.7102.6Investment assets (long-term) ......Property and equipment, net .......Other expenses............................Retained earnings, beginning.......Retained earnings, ending ...........Cash............................................Other assets (long-term)..............$…arrow_forward(Learning Objective 4: Record and report current liabilities) Travis Publishingcompleted the following transactions for one subscriber during 2018:Oct 1 Sold a one-year subscription, collecting cash of $1,800, plus sales tax of 10%.The subscription will begin on October 1.Nov 15 Remitted (paid) the sales tax to the state of South Carolina.Dec 31 Made the necessary adjustment at year-end.Requirement1. Journalize these transactions (explanations not required). Then report any liability on thecompany’s balance sheet at December 31, 2018.arrow_forwardPrepare the Adjusted Trial Balance for Smart Touch Learning for December. Check your spelling carefully and do not abbreviate. Enter account names exactly as provided in the account chart. Enter accounts in the order Assets, Liabilities, Equity, Revenues, and Expenses. ACCOUNT VALUE Accounts Receivable 1,700 Accumulated Depreciation - Furniture 200 Cash 35,270 Common Stock 36,800 Depreciation Expense - Furniture 200 Dividends 4,200 Furniture 13,400 Insurance Expense 450 Office Supplies 290 Prepaid Insurance 1,350 Rent Expense 2,000 Salaries Expense 6,600 Salaries Payable 4,600 Service Revenue 20,800 Supplies Expense 110 Unearned Revenue 3,400 Utilities Expense 230 Adjusted Trial BalanceDecember 31, 2016Month ended December 31, 2016Smart Books LearningSmart Touch LearningUnadjusted Trial Balance Adjusted Trial BalanceDecember 31, 2016Month ended December 31, 2016Smart Books LearningSmart Touch LearningUnadjusted Trial Balance…arrow_forward
- Sage Learning Centers was established on July 20, 2016, to provide educational services. The services provided during the remainder of the month are as follows: Instructions 1. Journalize the transactions for July, using a single-column revenue journal and a two-column general journal. Post to the following customer accounts in the accounts receivable ledger, and insert the balance immediately after recording each entry: D. Chase; J. Dunlop; F. Mintz; T. Quinn; K. Tisdale. 2. Post the revenue journal and the general journal to the following accounts in the general ledger, inserting the account balances only after the last postings: 3. a. What is the sum of the balances of the customer accounts in the subsidiary ledger at July 31? b. What is the balance of the accounts receivable controlling account at July 31? 4. Assume Sage Learning Centers began using a computerized accounting system to record the sales transactions on August 1. What are some of the benefits of the computerized system over the manual system?arrow_forwardE1-24A. (Learning Objective 4: Construct a balance sheet) At December 31, 2018, LandyProducts has cash of $24,000, receivables of $18,000, and inventory of $80,000. The company’sequipment totals $182,000. Landy owes accounts payable of $22,000 and long-term notespayable of $172,000. Common stock is $34,500. Prepare Landy’s balance sheet at December 31,2018, complete with its proper heading. Use the accounting equation to compute retainedearnings.arrow_forwardE3-25A. (Learning Objective 5: Close the books) Prepare the closing entries from thefollowing selected accounts from the records of North Pole Enterprises at December 31, 2018:Cost of services sold............ $14,800Accumulated depreciation... 41,100Selling, general, andadministrative expenses.... 6,200Retained earnings,December 31, 2017......... 2,000Service revenue....................... $32,200Depreciation expense ............. 4,100Other revenue ........................ 1,000Dividends declared................. 500Income tax expense ................ 900Income tax payable ................ 600How much net income did North Pole Enterprises earn during 2018? Prepare a T-account forRetained Earnings to show the December 31, 2018, balance of Retained Earningsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
How JOURNAL ENTRIES Work (in Accounting); Author: Accounting Stuff;https://www.youtube.com/watch?v=Y-_Q3rANyxU;License: Standard Youtube License