Q1. Adusting entries. The trial balance of Swift Company shows the following bal
ID: 2435848 • Letter: Q
Question
Q1. Adusting entries.The trial balance of Swift Company shows the following balances for selected accounts on November 30, 2006:
Prepaid Insurance $ 5,000 Unearned Revenue $ 1,800
Equipment 40,000 Notes Payable 24,000
Accumulated Depreciation 8,800 Interest Payable 400
Instructions
Using the additional information given below, prepare the appropriate monthly adjusting entries at November 30. Show computations.
A. Revenue earned for services rendered to customers, but not yet billed, totaled $4,000 on November 30.
B. The note payable is a 7%, 1-year note issued October 1, 2006.
C. The equipment was purchased on January 2, 2004, for $50,000. It has an estimated life of 4 years and an estimated salvage value of $2,000. Swift uses the straight-line depreciation method.
D. An insurance policy was acquired on June 30, 2006; the premium paid for 2 years was $12,000.
E. Smart received $1,800 of revenue in advance from a customer on November 1, 2005. Two-thirds of this amount was earned by November 30.
Q2.Inventory
Botter Company had a beginning inventory of 200 units at a cost of $13 per unit on August 1. During the month, the following purchases and sales were made.
Purchases Sales
August 4 250 units at $14 August 7 150 units
August 15 350 units at $15 August 11 100 units
August 28 200 units at $16 August 17 300 units
August 24 200 units
Botter uses a periodic inventory system.
Instructions
Determine ending inventory and cost of goods sold under (a) FIFO, and (b) LIFO.
(a) FIFO:
Ending inventory = $_____________; cost of goods sold = $____________.
(b) LIFO:
Ending inventory = $_____________; cost of goods sold = $____________.
Explanation / Answer
A. Revenue earned for services rendered to customers, but not yet billed, totaled $4,000 on November 30. Accounts receivable $4,000 Sales Revenue $4,000 B. The note payable is a 7%, 1-year note issued October 1, 2006. Interest Expense $140 Interest Payable $140 C. The equipment was purchased on January 2, 2004, for $50,000. It has an estimated life of 4 years and an estimated salvage value of $2,000. Swift uses the straight-line depreciation method. Depreciation expense $1,000 Accumulated Depreciation – equipment $1,000 D. An insurance policy was acquired on June 30, 2006; the premium paid for 2 years was $12,000. Insurance Expense $500 Prepaid Insurance $1,000 E. Smart received $1,800 of revenue in advance from a customer on November 1, 2005. Two-thirds of this amount was earned by November 30. Unearned revenue $1,200 Sales / service revenue $1,200 Q2.Inventory Botter Company had a beginning inventory of 200 units at a cost of $13 per unit on August 1. During the month, the following purchases and sales were made. Beginning 200 @ $13 = 2600 Purchases Sales August 4 250 units at $14 = 3500 August 7 150 units August 15 350 units at $15 = 5250 August 11 100 units August 28 200 units at $16 = 3200 August 17 300 units Total 1000 units =14,550 August 24 200 units 750 units Ending Inventory 250 units Botter uses a periodic inventory system. Instructions Determine ending inventory and cost of goods sold under (a) FIFO, and (b) LIFO. (a) FIFO: Ending inventory = $__3,950_____; cost of goods sold = $10,600______. (b) LIFO: Ending inventory = $__3,300_____; cost of goods sold = $_11,250_____.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.