Question: Prepare the following entries at 12/31/16 (end of year) for the Jacob Company:
- Payroll totals $4,700 per day. The pay week runs from Monday to the Friday (no one works over the weekend) with payday being the following Thursday. December 31st falls out on the Thursday of the pay week in question
- Jacob purchased a $104,000 machine on October 1, 2012 with an estimated life of 10 years and a salvage value of $16,000. Jacob uses straight line method. No adjustment was made to date in 2016.
- On October 1, 2016, the day the company moved into new office space, it paid 5 months' rent in advance and the bookkeeper debited rent expense and credited cash for $15,000. No other entry has been made to date in 2016. (Do not reverse the original entry.)
- On August 1, 2016 the company deposited $120,000 in a savings account paying 5% interest per year. No entry has been made in 2016.
- Opening supply inventory balance was $5,250. The company purchased an additional $10,500 of supplies during the year and debited supply expense for the amount. A count of the supply inventory revealed a balance remaining of $7,800 as of 12/31/16.
- The December utility bill was not received in time to be paid. The November invoice totaled $1,289.
- On September 1, 2016 the company paid $7,200 for an insurance policy covering the period November 1, 2016 â€" October 31, 2017. Prepaid insurance expense had been debited when the policy was paid.
- The company borrowed $120,000 from the bank on June 1, 2016 at an interest rate of 10% per year. No adjusting entries have been made in 2016.
- In December the company accepted $5,600 for work to be done in February 2017. The bookkeeper debited cash and credited service revenue.
-Accounts receivable balance at December 31, 2016 is $2,550,000. It is estimated that 3.5% of these receivables will never be collected.
-On December 31, 2016 Jacob completed a job for a client in the amount of $2,900. This amount has not yet been paid or billed.
-Jacob purchased property on August 1, 2016 and was required to pay property taxes for the period July 1, 2016 through June 30, 2017. The previous owner had paid through June 30, 2016. Jacob makes the $10,000 payment and debited property tax expense and credited cash on August 1st.