Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of
ID: 2377680 • Letter: S
Question
Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2011:
A bank loan had been obtained on December 1. Accrued interest on the loan at December 31 amounts to $1,220. No interest expense has yet been recorded.
Depreciation of the firm's office building is based on an estimated life of 25 years. The building was purchased in 2007 for $320,000.
Accrued, but unbilled, revenue during December amounts to $58,000.
On March 1, the firm paid $1,300 to renew a 12-month insurance policy. The entire amount was recorded as Prepaid Insurance.
The firm received $14,000 from the King Biscuit Company in advance of developing a six-month marketing campaign. The entire amount was initially recorded as Unearned Revenue. At December 31, $3,000 had actually been earned by the firm.
The company's policy is to pay its employees every Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $1,800.
Record the necessary adjusting journal entries on December 31, 2011. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar. Omit the "$" sign in your response.)
Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2011:
Explanation / Answer
1. interest expense a/c dr 1220
to interest payable a/c 1220
2.depreciation on building a/c dr 12800
to building a/c 12800
profit and loss a/c dr 12800
to depreciation a/c 12800
3. accrued income a/c dr 58000
to profit and loss a/c 58000
4.prepaid insurance a/c dr 1300
to cash a/c 1300
5.cash a/c dr 14000
to unearned revenue 14000
unearned revenue dr 3000
to cash a/c 3000
6.p/l a/c 1800
to accrued salaries a/c 1800
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