kimmel financial accounting 6th edition I am looking for the answer to question
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Question
kimmel financial accounting 6th edition
I am looking for the answer to question P4-3A pg 206
P4–3A Zheng Corporation had the following selected transactions in the month of March. The company adjusts its accounts monthly.
1. The company has an 8%, $12,000 bank loan payable due in one year. Interest is payable on the first day of each following month.
2. At the end of March, the company earned $250 interest on its investments. The bank deposited this amount in Zheng’s cash account on April 1.
3. Zheng has five employees who each earn $200 a day. Salaries are normally paid on Fridays for work completed Monday through Friday of the same week. Salaries were last paid on Friday, March 27. March 31 falls on a Tuesday this year. Salaries will be paid next on Friday, April 3.
4. At the end of March, the company owed the utility company $550 and the telephone company $200 for services received during the month. These bills were paid on April 10. (Hint: Use the Office Expense account for the telephone services.)
5. At the end of March, Zheng has earned service revenue of $3,000 that it has not yet billed. It bills its clients for this amount on April 4. On April 30, it collects $2,000 of this amount due.
Instructions
(a) Foreachoftheabovesituations,preparetheadjustingjournalentryrequiredatMarch31. (b) For each of the above situations, prepare the journal entry to record the subsequent cash transaction in April
(Kimmel 206)
Kimmel, Paul D. Financial Accounting: Tools for Business Decision-Making, Sixth Canadian Edition. John Wiley & Sons (Canada), 11/2013. VitalBook file.
The citation provided is a guideline. Please check each citation for accuracy before use.
Explanation / Answer
a)
1)Interest expense (db) $9600.1
interest payable(cr) $9600.1
working: Principal(P)=$12000 rate(R) =8% (per year)
simple Interest=PTR/100=(12000*1/12*8/100) (Taken 1/12 since it is for one month interest payble)
2) Cash receivable (db) $250
Other income(Cr)$250
3) Salaries expense(db) $4000
Salaraies payable(cr) $4000
working: No of days =4 (mar 28 to mar 31) no of employes:5 earning per day:200
=5*4*200=4000
4) utiity expense (db) $550
Utility expense payable(cr) $550
Office expense account (db) $200
Telephone expense payable (cr) $200
5)Unbilled revenue (db) $3000
Revenue (cr) $ 3000
b)Subsequent cash transaction in april
1)interest payable (db) $9600.1
cash (cr) $ 9600.1
2)Cash (db) $250
cash receivable(cr) $250
3) Salaraies payable(db) $4000
cash (cr) $4000 (This is for previous month march)
salaries expense(db)$3000
cash (cr) $3000(This if for new month Apr)
working: No of days =3 (Apr 1 to Apr 3) no of employes:5 earning per day:200
=5*3*200=3000
4)Utility expense payable(db) $550
Cash (cr) $550
Telephone expense payable (db) $200
Office expense account (cr) $200
5)Account receivable (db) $ 3000( For amount billed on Apr 4)
Unbilled revenue (cr) $3000
cash(db) $2000( For amount received on Apr 30)
Account receivable(cr) $ 2000
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