for each of the following separate cases, prepare adjusting entries required of
ID: 2448202 • Letter: F
Question
for each of the following separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 32, 2013. (Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance of work are initially recorded as liabilities.) For each of the following separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31, 2013. (Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance of work are initially recorded as liabilities.) a. One-third of the work related to $15,000 cash received in advance is performed this period. b. Wages of $8,000 are earned by workers but not paid as of December 31, 2013. c. Depreciation on the company's equipment for 2013 is $18,531 d. The Office Supplies account had a $240 debit balance on December 31, 2012. During 2013, $5,239 of office supplies are purchased. A physical count of supplies at December 31, 2013, shows $487 of sup- e. The Prepaid Insurance account had a $4,000 balance on December 31, 2012. An analysis of insurance f. The company has earned (but not recorded) $1,050 of interest from investments in CDs for the year g. The company has a bank loan and has incurred (but not recorded) interest expense of $2,500 for the plies available. policies shows that $1,200 of unexpired insurance benefits remain at December 31, 2013. ended December 31, 2013. The interest revenue will be received on January 10, 2014. year ended December 31, 2013. The company must pay the interest on January 2, 2014Explanation / Answer
Answer:
Jornal entries for th period ended 31st december 2013
(a) Advance against A/c Dr. $5000
To Revenue A/c $5000
( Being revenue recognised)
Revenue A/c Dr $5000.
To profit and loss A/c $5000
(Being Amount Transfered to P&L)
(b) Wages Expense A/c Dr. $8000
To Wages PayableA/c $8000
(Being expense Recognised)
Profit and loss A/c Dr. $8000
To Wages Expense $8000
(Being Amout Transfered to P&L)
(c) Depreciation on Equipment A/c Dr. $18531
To Equipment A/c $18531
(Being depreciation charged)
Profit and loss a/c Dr. $18,531
To Depreciation on Equipment $18,531
(d) Insurance exp. A/c Dr. $2800
To Prepaid Expenses A/c $2800
( Being insurance expenses recognised)
Profit and loss A/c Dr. $2800
To Insurance Exp. $2800
(Being expense transfered to P&L)
(f) Accrued Interest (Income) A/c Dr. $1050
To Interest on Investments $1050
(Being interest revenue recognises)
Interest on investment $1050
To Profit and loss A/c $1050
(being amount transfered to P&l)
(g) Interest Expense A/c Dr. $2500
To Interest PayableA/c $2500
(Being expense recognised)
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