Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 1P
- 1. Salaries accrued but unpaid total $2,840 on December 31.
- 2. The $247 December utility bill arrived on December 31 and has not been paid or recorded.
- 3. Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be
depreciated ; equipment with a cost of $44,000, 8-year life, and $2,000 residual value is also to be depreciated. The straight line method is to be used. - 4. A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Office Supplies account reduced by $397 for supplies used during the year.
- 5. The company holds a $6,000, 12% (annual rate), 6 month note receivable dated September 30, from a customer. The interest is to be collected on the maturity date.
- 6.
Bad debts expense is estimated to be 1% of annual sales. Sales total $65,000. - 7. An analysis of the company insurance policies indicates that the Prepaid Insurance account is to be reduced for $528 of expired insurance.
- 8. A review of travel expense reports indicates that $310 has been paid for airfare for a salesperson (and recorded as Travel Expenses), but has not yet been used.
- 9. The income tax rate is 30% on current income and will be paid in the first quarter of next year. The pretax income of the company before adjustments is $18,270.
Required:
Journalize the necessary year-end adjusting entries for Drake. Show supporting calculations in your
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Prepare journal entries to record the following transactions. You are required to show all
calculations:
3.1 The company adopted the straight-line depreciation method. Record the 15% depreciation on
the plant and equipment purchased On 1 December 2020 for R125 000.
3.2 The allowance for credit losses account has an opening balance of R4 500. The policy
requires the allowance to equate 8% of the total accounts receivable. The debtors sub-ledger
totaled R52 000 prior receiving 40c in the rand on an account of R3 000. The financial
manager instructed the write off on the balance.
Entry General Ledger Debit Credit.
Prepare correcting entries as of December 31, 2020
1. Depreciation computed on the building for the years 2018, 2019 and 2020 were overstated by P
12,000 per year.
2. Cost of the minor repair on the machinery of P 1,500, made on June 30, 2019, was charged to the
machinery account. Machinery is being depreciated at an annual rate of 10%.
3. Unused office supplies as of December 31, 2019 of P 1,250 were overlooked. The company debits
office supplies expense account upon purchase of supplies.
4. 3-year insurance premium of P 12,000 was paid on October 1, 2018. The amount was charged to
insurance expense account and no adjustments for the unexpired premium had been taken up.
5. Merchandise purchased in 2019 of P 22,000, terms FOB shipping point, were taken up in the
books when the goods were received in January 2020. These items were not included in the
inventory count made on December 31, 2019.
6. Merchandise sold for P 45,000 was delivered in 2018 and were recorded in…
Wolfpack Corp. has determined it should record depreciation expense of $40,000 for the year ending 12/31/X7.
Required: In the general journal below, complete the year-end entry to record depreciation.
Debit
Credit
Dec 31
?
40,000
?
40,000
Chapter 3 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 3 - What is the primary purpose of an accounting...Ch. 3 - What is the relationship between the accounting...Ch. 3 - Show the expanded accounting equation using the 10...Ch. 3 - Explain and distinguish between a transaction; an...Ch. 3 - Explain how the accounting equation organizes...Ch. 3 - What is the difference between a permanent and a...Ch. 3 - Prob. 7GICh. 3 - Why is it advantageous to a company to initially...Ch. 3 - What is a perpetual inventory accounting system?...Ch. 3 - Give examples of transactions that: a. Increase an...
Ch. 3 - Give examples of transactions that: a. Increase...Ch. 3 - Prob. 12GICh. 3 - Prob. 13GICh. 3 - Prob. 14GICh. 3 - Prob. 15GICh. 3 - Explain and provide examples of deferrals,...Ch. 3 - Prob. 17GICh. 3 - Prob. 18GICh. 3 - Prob. 19GICh. 3 - Prob. 20GICh. 3 - Prob. 21GICh. 3 - What are the major financial statements of a...Ch. 3 - Prob. 23GICh. 3 - Prob. 24GICh. 3 - Prob. 25GICh. 3 - Prob. 26GICh. 3 - Prob. 27GICh. 3 - Prob. 28GICh. 3 - Prob. 29GICh. 3 - What is cash-basis accounting? What must a company...Ch. 3 - On May 1, Johnson Corporation purchased inventory...Ch. 3 - On January 1, Tolson Company purchased a building...Ch. 3 - On July 1, Friler Company purchased a 1-year...Ch. 3 - Prob. 4RECh. 3 - Garcia Company rents out a portion of its building...Ch. 3 - Prob. 6RECh. 3 - Goldfinger Corporation had account balances at the...Ch. 3 - Prob. 8RECh. 3 - For the current year, Vidalia Company reported...Ch. 3 - Use the information in RE3-6, (a) assuming Ringo...Ch. 3 - (Appendix 3.1) Vickelly Company uses cash-basis...Ch. 3 - Financial Statement Interrelationship Draw a...Ch. 3 - Journal Entries Mead Company uses a perpetual...Ch. 3 - Journal Entries The following are selected...Ch. 3 - Adjusting Entries Your examination of Sullivan...Ch. 3 - Adjusting Entries The following are several...Ch. 3 - Adjusting Entries The following partial list of...Ch. 3 - Basic Income Statement The following are selected...Ch. 3 - Periodic Inventory System Raynolde Company uses a...Ch. 3 - Closing Entries Lloyd Bookstore shows the...Ch. 3 - Financial Statements Turtle Company has prepared...Ch. 3 - Worksheet for Service Company Whitaker Consulting...Ch. 3 - Worksheet, Including Inventory Surian Motors...Ch. 3 - Reversing Entries On December 31, 2019, Kellams...Ch. 3 - Special Journals The following are several...Ch. 3 - (Appendix 3.1) Cash-Basis Accounting Puntarelli...Ch. 3 - Adjusting Entries The following information is...Ch. 3 - Prob. 2PCh. 3 - Adjusting Entries Sarah Companys trial balance on...Ch. 3 - Prob. 4PCh. 3 - Errors in Financial Statements At the end of the...Ch. 3 - Journal Entries, Posting, and Trial Balance Luke...Ch. 3 - Effects of Errors: During the current accounting...Ch. 3 - Financial Statements Mackenzie Inc. uses a...Ch. 3 - Prob. 9PCh. 3 - Worksheet Victoria Company has the following...Ch. 3 - Worksheet Devlin Company has prepared the...Ch. 3 - Comprehensive On November 30, 2019. Davis Company...Ch. 3 - Reversing Entries Thomas Company entered into two...Ch. 3 - Reversing Entries On December 31, 2019, Mason...Ch. 3 - Adjusting Entries At the end of 2019, Richards...Ch. 3 - Prob. 16PCh. 3 - Comprehensive (Appendix 3.1) Dawson OConnor is the...
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