Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Adjusting entries and financial statements. The following information pertains to Sally Corporation:
• The company previously collected $1,500 as an advance payment for services to be rendered in the future. By the end of December, one half of this amount had been earned.
• Sally Corporation provided $1,500 of services to Artech Corporation; no billing had been made by December 31.
• Salaries owed to employees at year-end amounted to $1,000.
• The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period.
• The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months' rent of Sally Corporation's headquarters, beginning on November 1.
Sally Corporation's accounting year ends on December 31.
Instructions
Analyze the five preceding cases individually and determine the following:
a. The type of adjusting entry needed at year-end (Use the following codes: A, adjust¬ment of a prepaid expense; B, adjustment of an unearned revenue; C, adjustment to record an accrued expense; or D, adjustment to record an accrued revenue.)
b. The year-end journal entry to adjust the accounts
c. The income statement impact of each adjustment (e.g., increases total revenues by $500)
The company previously collected $1,500 as an advance payment for services to
be rendered in the future. By the end of December, one half of this amount had been
earned.
B, adjustment of an unearned revenue
Unearned service revenue
Debit $750
Service revenue
Credit
$750
Increase total revenue by $750
Sally Corporation provided $1,500 of services to Artech Corporation; no billing had
been made by December 31.
D, adjustment to record an accrued revenue.)
Accounts receivable
Debit $1,500
Service revenue
Credit
$1,500
Increase total revenue by $1,500
Salaries owed to employees at year-end amounted to $1,000.
C, adjustment to record an accrued expense
Salary expense
Debit $1,000
Salary Payable
Credit
$1,000
Increase total expense by $1,000
The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies
were actually on hand at the end of the period.

A, adjustment of a prepaid expense
Supplies expense
Debit $5,500
Supplies
Credit
$5,500
Increase total expense by $5,500
The company paid $18,000 on October 1 of the current year to Vantage Property
Management. The payment was for 6 months rent of Sally Corporations
headquarters, beginning on November 1.
Sally Corporations accounting year ends on December 31.
A, adjustment of a prepaid expense
Rent expense
Debit $6,000
Prepaid Rent
Credit
$6,000
Increase total expense by $6,000

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M942356

Have any Question? 


Related Questions in Accounting Basics

Tf question1under the modified accrual basis of accounting

T/F QUESTION 1 Under the modified accrual basis of accounting, there is no matching principle and no attempt to amortize costs that benefit multiple periods. 2 In fund accounting, expenditures may be classified in differ ...

Article critiqueuse the csu online library to locate and

Article Critique Use the CSU Online Library to locate and review a scholarly article found in a peer reviewed journal related to: Unions, Labor Relations, or International Human Resources Management. There is a minimum r ...

Current designsas a service to its customers current

CURRENT DESIGNS As a service to its customers, Current Designs repairs damaged kayaks. This is especially valuable to customers that have made a significant investment in the composite kayaks. To price the repair jobs, C ...

Question 1which entry would record the payment of a utility

Question 1 Which entry would record the payment of a utility bill? A. Debit Utilities Expense; credit Cash B. Debit Cash; credit Utilities Expense C. Debit Utilities Expense; credit Accounts Payable D. Debit Accounts Rec ...

1 ahn nguyen a vietnamese joint stock company has net

1. Ahn Nguyen, a Vietnamese Joint Stock Company has net income of 52,000 Vietnamese Dong, () and the following items: Depreciation Expense   16,000 Accounts Receivable Increase                    12,000 Inventory Decreas ...

Problem -the stay healthy medical clinics balance sheet on

Problem - The Stay Healthy Medical Clinic's Balance sheet on December 31, 2014 showed an owner's equity of $1,280,000. The December 31, 2015 balance sheet showed an owner's equity of $1,520,000. During the year, the owne ...

Assignemntpart 11the type of business organization that can

Assignemnt Part 1 1. The type of business organization that can continue indefinitely is known as a: a. sole proprietorship. b. partnership. c. corporation. d. None of the above answers are correct. 2. The purpose of the ...

Part a -exercise 1 - california graphics is a us

Part A - Exercise 1 - California Graphics is a U.S. corporation with $200 million of U.S.-source income and $10 million of foreign-source income. In addition, California Graphics has three-quarters ownership of a Canadia ...

Accounting paperfor this assignment you will decide what

Accounting paper For this assignment, you will decide what type of budget to implement for a start-up company. Write a three to four page paper in which you: 1. Summarize the type of manufacturing company you plan to sta ...

Accounting assignmentaccounting is the study of how

Accounting Assignment Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities in addition to preparing financial statements and recording busi ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro