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1) Prepare the journal entries to record the December adjustments. (Ignore any amounts that Simcoe pays for its share of CPP, EI). 2) Prepare the current liability section of Simcoe Ltd.'s statement of financial position as at December 31, 2021.

1) Prepare the journal entries to record the December adjustments. (Ignore any amounts that Simcoe pays for its share of CPP, EI). 2) Prepare the current liability section of Simcoe Ltd.'s statement of financial position as at December 31, 2021.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Simcoe Ltd, operates on a calendar-year basis. At the beginning of December 2021, the company had the following current liabilities on its books: Accounts payable Rent payable Warranty provision Unearned revenue In December 2021 the following events occurred: 1. Simcoe Ltd. purchased a new computer system on account at a cost of $28,000, payable on January 15, 2022. In addition, $4,000 was paid in cash to have the new computer system installed and customized to the company's requirements. 2. Simcoe Ltd. Purchased inventory for $93,000 on account and made payments of $86,000 to its suppliers. $85,000 $10,000 $12,000 $14,000 3. The rent that was payable at the beginning of December represented the payment that should have been made in November 2021. In December 2021, Simcoe Ltd paid the past rent owed, as well as the rent for December 2021 and January 2022. 4. By December 31, 2021, Simcoe Ltd. had earned $5,000 of the service revenue that was received in advance from customers. 5. Simcoe Ltd. employees are paid a total of $2,000 per day. Three work days elapsed between the last payday and the end of the fiscal year, December 31, 2021. (ignore any statutory deductions like CPP, EI.). 6. The company's products are sold with a two-year warranty against defects. Simcoe Ltd. estimates its warranty expense for the year (not previously recorded) as $16,000. During December 2021, it paid $10,000 in warranty claims. Required: 1) Prepare the journal entries to record the December adjustments. (Ignore any amounts that Simcoe pays for its share of CPP, EI). 2) Prepare the current liability section of Simcoe Ltd.'s statement of financial position as at December 31, 2021.
Transcribed Image Text:Simcoe Ltd, operates on a calendar-year basis. At the beginning of December 2021, the company had the following current liabilities on its books: Accounts payable Rent payable Warranty provision Unearned revenue In December 2021 the following events occurred: 1. Simcoe Ltd. purchased a new computer system on account at a cost of $28,000, payable on January 15, 2022. In addition, $4,000 was paid in cash to have the new computer system installed and customized to the company's requirements. 2. Simcoe Ltd. Purchased inventory for $93,000 on account and made payments of $86,000 to its suppliers. $85,000 $10,000 $12,000 $14,000 3. The rent that was payable at the beginning of December represented the payment that should have been made in November 2021. In December 2021, Simcoe Ltd paid the past rent owed, as well as the rent for December 2021 and January 2022. 4. By December 31, 2021, Simcoe Ltd. had earned $5,000 of the service revenue that was received in advance from customers. 5. Simcoe Ltd. employees are paid a total of $2,000 per day. Three work days elapsed between the last payday and the end of the fiscal year, December 31, 2021. (ignore any statutory deductions like CPP, EI.). 6. The company's products are sold with a two-year warranty against defects. Simcoe Ltd. estimates its warranty expense for the year (not previously recorded) as $16,000. During December 2021, it paid $10,000 in warranty claims. Required: 1) Prepare the journal entries to record the December adjustments. (Ignore any amounts that Simcoe pays for its share of CPP, EI). 2) Prepare the current liability section of Simcoe Ltd.'s statement of financial position as at December 31, 2021.
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