Loose-Leaf for Financial and Managerial Accounting
7th Edition
ISBN: 9781260004861
Author: John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Chapter 3, Problem 2E
Exercise 3-2 Adjusting and paying accrued expenses P1
The following three separate situations require adjusting
- The April 30
adjusting entry. - The subsequent entry during May to record payment of the accrued expenses
Entries can draw from the following partial chart of accounts. Cash; Accounts Receivable; Prepaid Interest; Salaries Payable; Interest Payable; Legal Services Payable; Unearned Revenue; Revenue; Salaries Expense; Interest Expense; Legal Services Expense;
- On April 1, the company retained an attorney for a flat monthly fee of $3,500. Payment for April legal services was made by the company on May 12.
- A $900.000 note payable requires 12% annual interest, or $9.000, to be paid at the 20th day of each month. The interest was last paid on April 20, and the next payment is due on May 20. As of April 30. $3.000 of interest expense has accrued. Check ( b ) May 20 Dr. Interest Expense, $6,000
- Total weekly salaries expense for all employees is $10,000. This amount is paid at the end of the day on Friday of each five-day workweek. April 30 falls on a Tuesday, which means that the employees had worked two days since the last payday. The next payday is May 3.
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Chapter 3 Solutions
Loose-Leaf for Financial and Managerial Accounting
Ch. 3 - Prob. 1MCQCh. 3 - Prior to recording adjusting entries, the Supplies...Ch. 3 - On May 1, 2017, a two-year insurance policy was...Ch. 3 - On November 1, 2017, Stockton Co. receives $3,600...Ch. 3 - If a company had $ 15,000 in net income for the...Ch. 3 - What is the difference between the cash basis and...Ch. 3 - Why is the accrual basis of accounting generally...Ch. 3 - What type of business is most likely to select a...Ch. 3 - Prob. 4DQCh. 3 - Prob. 5DQ
Ch. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - A If a company initially records prepaid expenses...Ch. 3 - Prob. 9DQCh. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Prob. 22DQCh. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Prob. 29DQCh. 3 - Periodic reporting C1 Choose from the following...Ch. 3 - Computing accrual and cash income C1 In its first...Ch. 3 - Identifying accounting adjustments P1 Classify the...Ch. 3 - Prob. 4QSCh. 3 - Prepaid (deferred) expenses adjustments P1 For...Ch. 3 - Prepaid (deferred) expense adjustments P1 For each...Ch. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Recording and analyzing adjusting entries P1...Ch. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Preparing adjusting entries P6 Garcia Company had...Ch. 3 - A preparing adjusting entries P4 Cal Consulting...Ch. 3 - Preparing closing entries from the ledger P4 The...Ch. 3 - Identifying post-closing accounts P5 Identify...Ch. 3 - identifying the accounting cycle C2 List the...Ch. 3 - Classifying balance sheet items C3 The following...Ch. 3 - Identifying current accounts and computing the...Ch. 3 - Prob. 26QSCh. 3 - Prob. 27QSCh. 3 - Prob. 28QSCh. 3 - Exercise 3-1 Adjusting and paying accrued wages P1...Ch. 3 - Exercise 3-2 Adjusting and paying accrued expenses...Ch. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Exercise 3-8 Preparing closing entries...Ch. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Exercise 3-16 Preparing a balance sheet following...Ch. 3 - Prob. 1PSACh. 3 - Prob. 2PSACh. 3 - Prob. 3PSACh. 3 - Prob. 4PSACh. 3 - Prob. 5PSACh. 3 - Prob. 6PSACh. 3 - Prob. 7PSACh. 3 - Prob. 8PSACh. 3 - Prob. 1PSBCh. 3 - Prob. 2PSBCh. 3 - Prob. 3PSBCh. 3 - Prob. 4PSBCh. 3 - Prob. 5PSBCh. 3 - Prob. 6PSBCh. 3 - Prob. 7PSBCh. 3 - Prob. 8PSBCh. 3 - No Account Title Debit Credit 101 Cash $38,264 106...Ch. 3 - Prob. 1GLPCh. 3 - Prob. 2GLPCh. 3 - Prob. 3GLPCh. 3 - Prob. 4GLPCh. 3 - Prob. 5GLPCh. 3 - Prob. 6GLPCh. 3 - Prob. 1BTNCh. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Prob. 5BTNCh. 3 - Prob. 6BTNCh. 3 - Prob. 7BTNCh. 3 - Prob. 8BTNCh. 3 - Prob. 9BTN
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- Problem 3-66A Effects of Adjusting Entries on the Accounting Equation Four adjusting entries are shown below. Wages Expense ……………………3,410 Wages Payable ……………………3,410 Accounts Receivable …………. 8,350 Service Revenue .….….….….….…..8,350 Rent Expense ……………….. 2,260 Prepaid Rent .….….….….….….… 2,260 Unearned Service Revenue ……………………… 5,150 Service Revenue …………………………………………….. 5,150 Required: CONCEPTUAL CONNECTION Analyze the adjusting entries and identify their effects on the financial statement accounts. (Note: Ignore any income tax effects.) Use the following format for your answer:arrow_forwardT accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of La Mesa Laundry at August 31, 2019, the end of the fiscal year, follows: La Mesa Laundry Unadjusted Trial Balance August 31,2019 Debit Balances Credit Balances Cash 3,800 Laundry Supplies 9,000 Prepaid Insurance 6,000 Laundry Equipment 180,800 Accumulated Depreciation 49,200 Accounts Payable 7,800 Bobbi Downey. Capital 95,000 Bobbi Downey. Drawing 2,400 Laundry Revenue 248,000 Wages Expense 135,800 Rent Expense 43,200 Utilities Expense 16,000 Miscellaneous Expense 3,000 400,000 400,000 The data needed to determine year-end adjustments are as follows: a.Wages accrued but not paid at August 31 are 2,200. b.Depreciation of equipment during the year is 8,150. c.Laundry supplies on hand at August 31 are 2,000. d.Insurance premiums expired during the year are 5,300. Instructions 1.For each account listed in the unadjusted trial balance, enter the balance in a T account. Identity the balance as "Aug. 31 Bal." In addition, add T accounts for Wages Payable, Depreciation Expense, Laundry Supplies Expense, and Insurance Expense. 2.(Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (1) as needed. 3.Journalize and post the adjusting entries. Identity the adjustments as "Adj." and the new balances as "Adj. Bal." 4.Prepare an adjusted trial balance. 5.Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet. 6.Journalize and post the closing entries. Identify the closing entries as "Clos." 7.Prepare a post-closing trial balance.arrow_forwardProblem 3-66A Effects of Adjusting Entries on the Accounting Equation Four adjusting entries are shown below. Interest Expense ……………………1,875 Interest Payable ……………………1,875 Interest Receivable …………. 1,150 Interest Revenue .….….….….….…..1,150 Insaurance Expense ……………….. 2,560 Prepaid Insaurance .….….….….….….… 2,560 Unearned Rent Revenue ……………………… 4,680 Rent Revenue …………………………………………….. 4,680 Required: CONCEPTUAL CONNECTION Analyze the adjusting entries and identify their effects on the financial statement accounts. (Note: Ignore any income tax effects.) Use the following format for your answer:arrow_forward
- Exercise 3-55 Effect of Adjustments on the Financial Statements VanBrush Enterprises, a painting contractor, prepared the following adjusting entries at year end: a. Wages Expense ................ 2,550 Wages Payable 2,550 b. Accounts Receivable ....... 8,110 Service Revenue .............. 8,110 c. Unearned Service Revenue ………………… 5,245 Service Revenue ………..... 5.245 d. Rent Expense ............. 3,820 Prepaid Rem .......... 3,820 Required: 1. Show the effect of these adjustments on assets, liabilities, equity, revenues, expenses, and net Income. 2. CONCEPTUAL CONNECTION If these adjustments were made with estimates that were considered conservative, how would this affect your interpretation of earnings quality?arrow_forwardProblem 3-68B Inferring Adjusting Entries from Account Balance Changes The following schedule shows all the accounts of Eagle Imports that received year end adjusting entries: Required: Calculate the missing amounts identified by the letters (a) through (e). Prepare the five adjusting entries that must have been made to cause the account changes as indicated.arrow_forwardLedger accounts, adjusting entries, financial statements, and closing entries; optional end-of-period spreadsheet The unadjusted trial balance of Recessive Interiors at January 31, 2016, the end of the year, follows: The data needed to determine year-end adjustments are as follows: a. Supplies on hand at January 31 are 2,850. b. Insurance premiums expired during the year are 3,150. c. Depreciation of equipment during the year is 5,250. d. Depreciation of trucks during the year is 4,000. e. Wages accrued but not paid at January 31 are 900. Instructions 1. For each account listed in the unadjusted trial balance, enter the balance in the appropriate Balance column of a four-column account and place a check mark () in the Posting Reference column. 2. (Optional) Enter the unadjusted trial balance on an end-of-period spreadsheet and complete the spreadsheet. Add the accounts listed in part (3) as needed. 3. Journalize and post the adjusting entries, inserting balances in the accounts affected. Record the adjusting entries on Page 26 of the journal. The following additional accounts from Recessive Interiors chart of accounts should be used: Wages Payable, 22; Depreciation ExpenseEquipment, 54; Supplies Expense, 55; Depreciation ExpenseTrucks, 56; Insurance Expense, 57. 4. Prepare an adjusted trial balance. 5. Prepare an income statement, a statement of owners equity (no additional investments were made during the year), and a balance sheet. 6. Journalize and post the closing entries. Record the closing entries on Page 27 of the journal. (Income Summary is account #33 in the chart of accounts.) Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry. 7. Prepare a post-closing trial balance.arrow_forward
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