Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
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Chapter 4, Problem 4.6.1AAP
To determine
Concept Introduction:
Journal entries are the part of basic accounting or primary accounting. In journal entries there are two aspects one is debit and another is credit. These two aspects are always equal. Journal entries are based on the ledger and
To Prepare:
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For each of the following information pertaining to Von Company, a fiscal-year company, prepare the necessary adjusting entries as of May 31,2017.
Von Company enterd into a lease agreement with Carmel Company on November 1,2016, for the rental of office space for the next 24 months for P312,000. All rent payments for this lease was paid when due at the end of each month. A second lease agreement was signed on February 1, 2017 for use of warehouse for six months, with P112,800 paid in advance, which Von debited to Rent Expense
The Mazzanti Wholesale Food Company’s fiscal year-end is June 30. The company issues quarterly financialstatements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterlyadjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30,2018, for the following situations. 5. Employee salaries and wages for the month of June 2018 of $16,000 will be paid on July 20, 2018.
Baylor Company began subleasing office space in its new building on July 1, 2016. At December 31, Baylor Company had the following rental contracts that are paid in full for the entire term of the lease. Baylor Company recorded all advance collections initially under a revenue account.
Date
Term (months)
Monthly Rent
No. of Leases
October 1
9
$1,500
2
November 1
15
$3,500
5
The appropriate adjusting entry to be made at December 31, 2016 includes:
A. Debit Rent revenue $49,100
B. Debit Rent revenue $44,500
C. Debit Rent revenue $245,500
D. Debit Unearned rent $289,500
Chapter 4 Solutions
Using Financial Accounting Information
Ch. 4 - Revenue Recognition The highway department...Ch. 4 - Prob. 4.2.1ECh. 4 - Prob. 4.2.2ECh. 4 - Prob. 4.2.3ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6.1ECh. 4 - Prob. 4.6.2ECh. 4 - Prob. 4.6.3E
Ch. 4 - Prob. 4.6.4ECh. 4 - Prob. 4.7.1ECh. 4 - Prob. 4.7.2ECh. 4 - Prob. 4.8.1ECh. 4 - Prob. 4.8.2ECh. 4 - Prob. 4.8.3ECh. 4 - Prob. 4.8.4ECh. 4 - Prob. 4.8.5ECh. 4 - Prob. 4.9.1ECh. 4 - Working Backward: Depreciation Polk Corp....Ch. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.12.1ECh. 4 - Prob. 4.12.2ECh. 4 - Prob. 4.12.3ECh. 4 - Prob. 4.13.1ECh. 4 - Prob. 4.13.2ECh. 4 - Prob. 4.13.3ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15.1ECh. 4 - Prob. 4.15.2ECh. 4 - Prob. 4.15.3ECh. 4 - Prob. 4.15.4ECh. 4 - Prob. 4.15.5ECh. 4 - Prob. 4.16.1ECh. 4 - Prob. 4.16.2ECh. 4 - Prob. 4.16.3ECh. 4 - Prob. 4.17.1ECh. 4 - Prob. 4.17.2ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.19.1ECh. 4 - Prob. 4.19.2ECh. 4 - Prob. 4.20.1ECh. 4 - Prob. 4.20.2ECh. 4 - Prob. 4.20.3ECh. 4 - Prob. 4.21.1ECh. 4 - Prob. 4.21.2ECh. 4 - Prob. 4.22ECh. 4 - The Effect of Ignoring Adjustments on Net Income...Ch. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26.1MCECh. 4 - Prob. 4.26.2MCECh. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Prob. 4.28.1MCECh. 4 - Prob. 4.28.2MCECh. 4 - Prob. 4.1.1PCh. 4 - Prob. 4.1.2PCh. 4 - Prob. 4.2.1PCh. 4 - Prob. 4.2.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4.1PCh. 4 - Prob. 4.4.2PCh. 4 - Prob. 4.5.1PCh. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.5.3PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.6.3PCh. 4 - Prob. 4.6.4PCh. 4 - Prob. 4.6.5PCh. 4 - Prob. 4.6.6PCh. 4 - Prob. 4.7.1PCh. 4 - Prob. 4.7.2PCh. 4 - Prob. 4.8MCPCh. 4 - Prob. 4.9.1MCPCh. 4 - Prob. 4.9.2MCPCh. 4 - Monthly Transactions, Adjustments, and Financial...Ch. 4 - Prob. 4.9.4MCPCh. 4 - Prob. 4.9.5MCPCh. 4 - Prob. 4.1.1AAPCh. 4 - Prob. 4.1.2AAPCh. 4 - Prob. 4.2.1AAPCh. 4 - Prob. 4.2.2AAPCh. 4 - Prob. 4.3AAPCh. 4 - Use of Account Balances as a Basis for Annual...Ch. 4 - Prob. 4.4.2AAPCh. 4 - Prob. 4.5.1AAPCh. 4 - Prob. 4.5.2AAPCh. 4 - Prob. 4.6.1AAPCh. 4 - Prob. 4.6.2AAPCh. 4 - Prob. 4.6.3AAPCh. 4 - Prob. 4.6.4AAPCh. 4 - Prob. 4.6.5AAPCh. 4 - Prob. 4.6.6AAPCh. 4 - Prob. 4.7.1AAPCh. 4 - Prob. 4.7.2AAPCh. 4 - Prob. 4.8AAMCPCh. 4 - Prob. 4.9.1AAMCPCh. 4 - Prob. 4.9.2AAMCPCh. 4 - Prob. 4.9.3AAMCPCh. 4 - Prob. 4.9.4AAMCP
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- Adjusting Entries Kretz Corporation prepares monthly financial statements and therefore adjusts its accounts at the end of every month. The following information is available for March 2016: Kretz Corporation takes out a 90-day, 8%, $15,000 note on March 1, 2016, with interest and principal to be paid at maturity. The asset account Office Supplies on Hand has a balance of $1,280 on March 1, 2016. During March, Kretz adds $750 to the account for purchases during the period. A count of the supplies on hand at the end of March indicates a balance of $1,370. The company purchased office equipment last year for $62,600. The equipment has an estimated useful life of six years and an estimated salvage value of $5,000. The companys plant operates seven days per week with a daily payroll of $950. Wage earners are paid every Sunday. The last day of the month is Thursday, March 31. The company rented an idle warehouse to a neighboring business on February 1, 2016, at a rate of $2,500 per month. On this date, Kretz Corporation credited Rent Collected in Advance for six months rent received in advance. On March 1, 2016, Kretz Corporation credited a liability account, Customer Deposits, for $4,800. This sum represents an amount that a customer paid in advance and that Kretz will earn evenly over a four-month period. Based on its income for the month, Kretz Corporation estimates that federal income taxes for March amount to $3,900. Required For each of the preceding situations, prepare in general journal form the appropriate adjusting entry to be recorded on March 31, 2016.arrow_forwardPrepaid Rent—Quarterly Adjustments On September 1, Northhampton Industries signed a six-month lease for office space, which is effective September 1. Northhampton agreed to prepay the rent and mailed a check for $12,000 to the landlord on September 1. Assume that Northhampton prepares adjusting entries only four times a year: on March 31, June 30, September 30, and December 31. Required Compute the rental cost for each full month. Prepare the journal entry to record the payment of rent on September 1. Prepare the adjusting entry on September 30. Assume that the accountant prepares the adjusting entry on September 30 but forgets to record an adjusting entry on December 31. Will net income for the year be understated or overstated? by what amount?arrow_forwardInterest Payable—Quarterly Adjustments Glendive takes out a 12%, 90-day, $100,000 loan with Second State Bank on March 1, 2016. Assume that Glendive prepares adjusting entries only four times a year: on March 31, June 30, September 30, and December 31. Required Prepare the journal entry on March 1, 2016. Prepare the adjusting entry on March 31, 2016. Prepare the entry on May 30, 2016, when Glendive repays the principal and interest to Second State Bank.arrow_forward
- Rent Receivable Hudson Corp. has extra space in its warehouse and agrees to rent it out to Stillwater Company at the rate of $2,000 per month. The space was made available to Stillwater beginning on September 1. Under the terms of the agreement, Stillwater pays the months rent on the fifth day after the end of the month. Assume that Hudson prepares adjusting entries at the end of each month. Required How much revenue should Hudson record in September? How much revenue should Hudson record in October? Prepare the necessary entries on Hudsons books during the month of October.arrow_forwardWorking Backward: Rent Receivable Randys Rentals reported the following on its year-end balance sheets: Randys rents space to a number of tenants, all of whom pay their monthly rent on the 10th of the following month. Randys reported rent revenue for 2016 of $64,200. Required How much cash did Randys collect from its tenants during 2016? Explain your answer.arrow_forwardAccrued Wages A company employs a part-time staff of 50 employees, each earning $10 per hour and working 30 hours per week. Employees work 5 days per week, Monday through Friday, and are paid weekly on Fridays. The appropriate journal entry was recorded at the end of the accounting period, Tuesday, April 30, 2019. Required: What journal entries are made on Tuesday, April 30, and Friday, May 3, 2019?arrow_forward
- Unearned Rent Revenue Mannion Property Management leases commercial properties and expects its clients to pay rent on a monthly basis. A new client signs a 4-year lease with a yearly rent of $420,000 and agrees to pay the first 6 months in advance. Required: Make the journal entry to record the following transactions. 1. The customers prepayment of 6 months' rent 2. The necessary adjusting entry after 1 month has passedarrow_forwardThe Mazzanti Wholesale Food Company’s fiscal year-end is June 30. The company issues quarterly financialstatements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterlyadjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30,2018, for the following situations.1. On December 1, 2017, the company paid its annual fire insurance premium of $6,000 for the year beginningDecember 1.arrow_forwardThe Mazzanti Wholesale Food Company’s fiscal year-end is June 30. The company issues quarterly financialstatements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterlyadjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30,2018, for the following situations. 2. On August 31, 2017, the company borrowed $80,000 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2018..arrow_forward
- The Mazzanti Wholesale Food Company’s fiscal year-end is June 30. The company issues quarterly financialstatements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterlyadjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30,2018, for the following situations. 4. Depreciation on the office building is $20,000 for the fiscal yeararrow_forwardThe Mazzanti Wholesale Food Company’s fiscal year-end is June 30. The company issues quarterly financial statements requiring the company to prepare adjusting entries at the end of each quarter. Assuming all quarterly adjusting entries were properly recorded, prepare the necessary year-end adjusting entries at the end of June 30, 2016, for the following situations. 1. On December 1, 2015, the company paid its annual fire insurance premium of $6,000 for the year beginning December 1 .2. On August 31, 2015, the company borrowed $80,000 from a local bank. The note requires principal and interest at 8% to be paid on August 31, 2016. 3. Mazzanti owns a warehouse that it rents to another company. On January 1, 2016, Mazzanti collected $24,000 representing rent for the 2016 calendar year. 4. Depreciation on the office building is $20,000 for the fiscal year. 5. Employee salaries and wages for the month of June 2016 of $16,000 will be paid on July 20, 2016.arrow_forwardOn 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.arrow_forward
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