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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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 made on December 31, and determine whether a [reversing entry](https://www.yourwebsite.com/reversing-entry) is needed.
#### Adjusting Entries Table
| Date | Description | Debit | Credit | Reversing entry necessary | Reversing entry not necessary |
|------------------|---------------------|---------|---------|---------------------------|-------------------------------|
| Dec. 31 | Interest Receivable | 1,200 | |  | |
| | Interest Revenue | | 1,200 | | |
| Dec. 31 | Rent Expense | 1,000 | | |  |
| | Prepaid Rent | | 1,000 | | |
| Dec. 31 | Interest Expense | 800 | |  | |
| | Interest Payable | | 800 | | |
| Dec. 31 | Supplies Expense | 520 | | |  |
| | Supplies | | 520 | | |
**Legend:**
- : Indicates the selection made for whether a reversing entry is necessary.
### Explanation
Click [here](https://www.yourwebsite.com/explanation) for a detailed explanation of why reversing entries might be necessary for interest receivables and expenses but not for prepaid rent and supply expenses.
### Additional Resources
- [Adjusting Entries](https://www.yourwebsite.com/adjusting-entries)
- [Reversing Entries](https://www.yourwebsite.com/reversing-entry)
*Note: The linked images and URLs are placeholders and should be replaced with actual content when integrating into your educational website.*](https://content.bartleby.com/qna-images/question/00823920-ca43-4f0f-b382-33f22e86ffd0/8812cbcb-b520-400a-a02b-539c8297bac6/d17et28_thumbnail.jpeg)
Transcribed Image Text:### Reversing Entries: Adjusting Entries Analysis
Certain adjusting entries made at the end of an accounting period are reversed at the beginning of the following period.
**Required:**
Analyze the following four [adjusting entries](https://www.yourwebsite.com/adjusting-entries) made on December 31, and determine whether a [reversing entry](https://www.yourwebsite.com/reversing-entry) is needed.
#### Adjusting Entries Table
| Date | Description | Debit | Credit | Reversing entry necessary | Reversing entry not necessary |
|------------------|---------------------|---------|---------|---------------------------|-------------------------------|
| Dec. 31 | Interest Receivable | 1,200 | |  | |
| | Interest Revenue | | 1,200 | | |
| Dec. 31 | Rent Expense | 1,000 | | |  |
| | Prepaid Rent | | 1,000 | | |
| Dec. 31 | Interest Expense | 800 | |  | |
| | Interest Payable | | 800 | | |
| Dec. 31 | Supplies Expense | 520 | | |  |
| | Supplies | | 520 | | |
**Legend:**
- : Indicates the selection made for whether a reversing entry is necessary.
### Explanation
Click [here](https://www.yourwebsite.com/explanation) for a detailed explanation of why reversing entries might be necessary for interest receivables and expenses but not for prepaid rent and supply expenses.
### Additional Resources
- [Adjusting Entries](https://www.yourwebsite.com/adjusting-entries)
- [Reversing Entries](https://www.yourwebsite.com/reversing-entry)
*Note: The linked images and URLs are placeholders and should be replaced with actual content when integrating into your educational website.*
Expert Solution
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- Accountarrow_forwardDetermine the amount to be added to Allowance for Doubtful Accounts in each of the following cases and indicate the ending balance in each case. a. Credit balance of $400 in Allowance for Doubtful Accounts just prior to adjustment. Using the aging method, the balance of Allowance for Doubtful Accounts is estimated as $8,710. Line Item Description Amount Amount added $fill in the blank 1 Ending balance $fill in the blank 2 b. Credit balance of $400 in Allowance for Doubtful Accounts just prior to adjustment. Bad debt expense is estimated at 2% of credit sales, which totaled $973,000 for the year. Line Item Description Amount Amount added $fill in the blank 3 Ending balance $fill in the blank 4arrow_forwardThe Garware Company uses allowance method to recognize uncollectible accounts expense. It provides you the following selected information Accounts receivable on December 31 2020 RO 280000 Required balance in Allowance for Doubtful Accounts account on December 31 2020 RO 4000 Existing balance in Allowance for Doubtful Accounts account on December 31 2019 RO 3500 The journal entry to recognize uncollectible accounts expense on December 31 2017 is a. Dr Uncollectible Accounts Expense 4000 and Cr Allowance for Doubtful Accounts 4000 b. Dr Uncollectible Accounts Expense 500 and Cr Allowance for Doubtful Accounts 500 c. Dr Accounts Receivable 3500 Cr Allowance for Uncollectible Accounts Expense 3500 d. Dr Accounts Receivable 3500 Cr Uncollectible Accounts Expense 3500arrow_forward
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