Pearson eText Horngren's Financial & Managerial Accounting: The Financial Chapters -- Instant Access (Pearson+)
7th Edition
ISBN: 9780136714194
Author: Tracie Miller-Nobles, Brenda Mattison
Publisher: PEARSON+
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Question
Chapter 3, Problem 3.16SE
1.
To determine
Concept Introduction:
Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.
The adjustment entry for accrued salaries on December 31.
2.
To determine
Concept Introduction:
Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur.
The adjustment entry to record earning of revenue.
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REQUIRED
Record the adjustment journal entry in respect of rent income in the books of NT Stores as at 28
February 2022.
INFORMATION
The Rent Income account of NT Stores reflected a total of R276 000 on 28 February 2022, the end of
the accounting period. This was in respect of rent for an office occupied by a tenant for the entire
financial year. The monthly rental was increased by 10% with effect from 01 September 2021. The rent
for February 2022 was due to be received on 01 March 2022.
On December 1, 2019, an advance rent payment of $25,800, representing a three-month prepayment for the months of December, January, and February, was received in cash from the company’s tenant.
Required: Use the horizontal model (or write the journal entries) to record the effects of the following items:
a. The three months of rent collected in advance on December 1, 2019.
b. The adjustment that will be made at the end of each month to show the amount of rent “earned” during the month.
Prepare correcting entries as of December 31, 2020
7. The delivery expense of P 1,800 incurred on October 1, 2020 was debited to delivery equipment
account. Delivery equipment is being depreciated at an annual rate of 12%.
8. Accrued rent expenses were overlooked at the end of 2018, P 2,470; at the end of 2019 of P 3,450;
and at the end of 2020, P 5,000.
9. As a result of errors in the physical count, inventories were overlooked by P 24,500 at December
31, 2019 and by P 27,650 at December 31, 2020.
10. On July 1, 2020, fully depreciated equipment purchased for P 21,000, was sold as scrap for P
2,500. The only entry made was to debit cash and credit delivery equipment for the scrap
proceeds.
11. Advance payment of a customer in 2019 for goods to be delivered in 2020 of P 5,000. The
payment was credited to accounts receivable.
12. Purchases of merchandise in 2020, FOB destination, P 24,000, were taken up in the books in
2020. This was not included in the December 31,…
Chapter 3 Solutions
Pearson eText Horngren's Financial & Managerial Accounting: The Financial Chapters -- Instant Access (Pearson+)
Ch. 3 - Which of the following is true of accrual basis...Ch. 3 - Get Fit Now gains a client who prepays 540 for a...Ch. 3 - The revenue recognition principle requires a. time...Ch. 3 - Adjusting the accounts is the process of a....Ch. 3 - Which of the following is an example of a deferral...Ch. 3 - Assume that the weekly payroll of In the Woods...Ch. 3 - The adjusted trial balance shows a. amounts that...Ch. 3 - A D Window Cleaning performed 450 of services but...Ch. 3 - A worksheet a. is a journal used to record...Ch. 3 - On February 1, Clovis Wilson Law Firm contracted...
Ch. 3 - What is the difference between cash basis...Ch. 3 - Which method of accounting (cash or accrual basis)...Ch. 3 - Which accounting concept or principle requires...Ch. 3 - What is a fiscal year? Why might companies choose...Ch. 3 - Under the revenue recognition principle, when is...Ch. 3 - Prob. 6RQCh. 3 - When are adjusting entries completed, and what is...Ch. 3 - Prob. 8RQCh. 3 - Prob. 9RQCh. 3 - Prob. 10RQCh. 3 - Prob. 11RQCh. 3 - Prob. 12RQCh. 3 - Prob. 13RQCh. 3 - Prob. 14RQCh. 3 - Prob. 15RQCh. 3 - What is an accrued expense? Provide an example.Ch. 3 - What is an accrued revenue? Provide an example.Ch. 3 - Prob. 18RQCh. 3 - When is an adjusted trial balance prepared, and...Ch. 3 - If an accrued expense is not recorded at the end...Ch. 3 - What is a worksheet, and how is it used to help...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - If a payment of a deferred expense was recorded...Ch. 3 - Prob. 3.1SECh. 3 - Prob. 3.2SECh. 3 - Prob. 3.3SECh. 3 - Prob. 3.4SECh. 3 - Identifying types of adjusting entries A select...Ch. 3 - Prob. 3.6SECh. 3 - Prob. 3.7SECh. 3 - Prob. 3.8SECh. 3 - Prob. 3.9SECh. 3 - Prob. 3.10SECh. 3 - Prob. 3.11SECh. 3 - Prob. 3.12SECh. 3 - Prob. 3.13SECh. 3 - Determining the effects on financial statements In...Ch. 3 - Prob. 3.15SECh. 3 - Prob. 3.16SECh. 3 - Prob. 3.17SECh. 3 - Prob. 3.18ECh. 3 - Prob. 3.19ECh. 3 - Prob. 3.20ECh. 3 - Prob. 3.21ECh. 3 - Prob. 3.22ECh. 3 - Prob. 3.23ECh. 3 - Prob. 3.24ECh. 3 - Prob. 3.25ECh. 3 - Prob. 3.26ECh. 3 - Identifying the impact of adjusting entries on the...Ch. 3 - Prob. 3.28ECh. 3 - Prob. 3.29ECh. 3 - Prob. 3.30ECh. 3 - Prob. 3.31ECh. 3 - Prob. 3.32ECh. 3 - Prob. 3.33APCh. 3 - Prob. 3.34APCh. 3 - Prob. 3.35APCh. 3 - Prob. 3.36APCh. 3 - Prob. 3.37APCh. 3 - Prob. 3.38APCh. 3 - Prob. 3.39BPCh. 3 - Prob. 3.40BPCh. 3 - Prob. 3.41BPCh. 3 - Prob. 3.42BPCh. 3 - Prob. 3.43BPCh. 3 - Prob. 3.44BPCh. 3 - Prob. 3.45CPCh. 3 - Prob. 3.46PSCh. 3 - Prob. 3.1CTDCCh. 3 - Prob. 3.1CTEICh. 3 - Prob. 3.1CTFCCh. 3 - Prob. 3.1CTCA
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