Financial & Managerial Accounting
13th Edition
ISBN: 9781285866307
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 3, Problem 3.17EX
(a)
To determine
Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle. All adjusting entries affect at least one income statement account (revenue or expense), and one balance sheet account (asset or liability).
Rule of Debit and Credit:
Debit - Increase in all assets, expenses & dividends, and decrease in all liabilities and
Credit - Increase in all liabilities and stockholders’ equity, and decrease in all assets & expenses.
To prepare: The adjusting entry for the two taxes at the end of the year.
(b)
To determine
The amount of tax expense of Company A for the current year.
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Adjusting entries for prepaid and accrued taxesA-Z Construction Company was organized on May 1 of the current year.On May 2, A-Z Construction pre paid $18,480 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. A-Z Construction is also required to pay in January an annual tax (on property) for the previous calendar year. The estimated amount of the property tax for the current year (May 1 to December 31) is $45,000.A. journalize the two adjusting entries required to bring the accounts affected by the two taxes up to date as of December 31, the end of the current year.B. What is the amount of tax expense for the current year?
Adjusting entries for prepaid and accrued taxes
A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $18,480 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. A-Z Construction is also required to pay in January an annual tax (on property) for the previous calendar year. The estimated amount of the property tax for the current year (May 1 to December 31) is $45,000.
Question Content Area
a. Journalize the two adjusting entries required to bring the accounts affected by the two taxes up to date as of December 31, the end of the current year. If an amount box does not require an entry, leave it blank.
Transaction
Account
Debit
Credit
License fees
Property tax
Question Content Area
b. What is the amount of tax expense for the current year?fill in the blank 1 of 1$
A-Z Construction Company was organized on May 1 of the current year. On May 2, A-Z Construction prepaid $18,480 to the city for taxes (license fees) for the next 12 months and debited the prepaid taxes account. A-Z Construction is also required to pay in January an annual tax (on property) for the current calendar year of $45,000.a. Journalize the two adjusting entries required to bring the accounts affected by the two taxes up to date as of December 31, the end of the current year.b. What is the amount of tax expense for the current year?
Chapter 3 Solutions
Financial & Managerial Accounting
Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (A) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - If the effect of the credit portion of an...Ch. 3 - Does every adjusting entry have an effect on...Ch. 3 - Prob. 9DQCh. 3 - (A) Explain the purpose of the two accounts:...
Ch. 3 - Prob. 3.1APECh. 3 - Accounts requiring adjustment Indicate with a Yes...Ch. 3 - Type of adjustment Classify the following items as...Ch. 3 - Prob. 3.2BPECh. 3 - Adjustment for prepaid expense The supplies...Ch. 3 - Adjustment for prepaid expense The prepaid...Ch. 3 - Adjustment for unearned revenue The balance in the...Ch. 3 - Prob. 3.4BPECh. 3 - Prob. 3.5APECh. 3 - Adjustment for accrued revenues At the end of the...Ch. 3 - Adjustment for accrued expense We-Sell Realty Co....Ch. 3 - Adjustment for accrued expense Prospect Realty Co....Ch. 3 - Prob. 3.7APECh. 3 - Adjustment for depreciation The estimated amount...Ch. 3 - Effect of omitting adjustments For the year ending...Ch. 3 - Prob. 3.8BPECh. 3 - Prob. 3.9APECh. 3 - Effect of errors on adjusted trial balance For...Ch. 3 - Prob. 3.10APECh. 3 - Prob. 3.10BPECh. 3 - Classifying types of adjustments Classify the...Ch. 3 - Classifying adjusting entries The following...Ch. 3 - Prob. 3.3EXCh. 3 - Determining supplies purchased The supplies and...Ch. 3 - Effect of omitting adjusting entry At March 31,...Ch. 3 - Prob. 3.6EXCh. 3 - Adjusting entries for prepaid insurance The...Ch. 3 - Adjusting entries for unearned fees The balance in...Ch. 3 - Effect of omitting adjusting entry At the end of...Ch. 3 - Adjusting entry for accrued fees At the end of the...Ch. 3 - Prob. 3.11EXCh. 3 - Effect on omitting adjusting entry The adjusting...Ch. 3 - Prob. 3.13EXCh. 3 - Determining wages paid The wages payable and wages...Ch. 3 - Effect of omitting adjusting entry Accrued...Ch. 3 - Prob. 3.16EXCh. 3 - Prob. 3.17EXCh. 3 - Prob. 3.18EXCh. 3 - Prob. 3.19EXCh. 3 - Prob. 3.20EXCh. 3 - Prob. 3.21EXCh. 3 - Prob. 3.22EXCh. 3 - Effects of errors on financial statements The...Ch. 3 - Effects of errors on financial statements If the...Ch. 3 - Prob. 3.25EXCh. 3 - Prob. 3.26EXCh. 3 - Prob. 3.27EXCh. 3 - Prob. 3.28EXCh. 3 - Prob. 3.29EXCh. 3 - Prob. 3.1APRCh. 3 - Prob. 3.2APRCh. 3 - Prob. 3.3APRCh. 3 - Prob. 3.4APRCh. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Adjusting entries and errors At the end of April,...Ch. 3 - Prob. 3.1BPRCh. 3 - Adjusting entries Selected account balances before...Ch. 3 - Adjusting entries Crazy Mountain Outfitters Co.,...Ch. 3 - Prob. 3.4BPRCh. 3 - Adjusting entries and adjusted trial balances...Ch. 3 - Prob. 3.6BPRCh. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Prob. 3.1CPCh. 3 - Prob. 3.2CPCh. 3 - Prob. 3.3CP
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