Jay, Incorporated, a party rental business, completed its third year of operations on December 31. Because this is the end of the annual accounting period, the company bookkeeper prepared the following tentative income statement: Rent revenue Income Statement $101,000 Expenses: Salaries and wages expense 25,600 Maintenance expense 10,700 Rent expense 7,700 Utilities expense 4,500 Gas and oil expense 3,200 Miscellaneous expenses (items not listed 1,200 elsewhere) Total expenses Income 52,900 $48,100 You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your audit, you developed additional data as follows: a. Salaries and wages for the last three days of December amounting to $670 were not recorded or paid. b. Jay estimated telephone usage at $310 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $22,500 for the current year, was not recorded. d. Interest on a $10,000, one-year, 8 percent note payable dated October 1 of the current year was not recorded. The 8 percent interest is payable on the maturity date of the note. e. Maintenance expense excludes $2,500, representing the cost of maintenance supplies used during the current year. f. The Unearned Rent Revenue account includes $4,700 of revenue to be earned in January of next year. g. The income tax expense is $5,000. Payment of income tax will be made next year. Required: 1. What adjusting entry for each item (a) through (g) should Jay record at December 31? 2. Prepare a corrected income statement for the current year including earnings per share. Assume that 7,400 shares of stock are outstanding all year. 3. Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's total assets was $58,220 and its ending balance for total assets was $65,380. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 What adjusting entry for each item (a) through (g) should Jay record at December 31? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 Salaries and wages for the last three days of December amounting to $670 were not recorded or paid. Note: Enter debits before credits. Transaction a. General Journal Debit Credit Record entry View general journal Clear entry > Show less▲

Jay, Incorporated, a party rental business, completed its third year of operations on December 31. Because this is the end of the annual accounting period, the company bookkeeper prepared the following tentative income statement: Rent revenue Income Statement $101,000 Expenses: Salaries and wages expense 25,600 Maintenance expense 10,700 Rent expense 7,700 Utilities expense 4,500 Gas and oil expense 3,200 Miscellaneous expenses (items not listed 1,200 elsewhere) Total expenses Income 52,900 $48,100 You are an independent CPA hired by the company to audit the company's accounting systems and review the financial statements. In your audit, you developed additional data as follows: a. Salaries and wages for the last three days of December amounting to $670 were not recorded or paid. b. Jay estimated telephone usage at $310 for December, but nothing has been recorded or paid. c. Depreciation on rental autos, amounting to $22,500 for the current year, was not recorded. d. Interest on a $10,000, one-year, 8 percent note payable dated October 1 of the current year was not recorded. The 8 percent interest is payable on the maturity date of the note. e. Maintenance expense excludes $2,500, representing the cost of maintenance supplies used during the current year. f. The Unearned Rent Revenue account includes $4,700 of revenue to be earned in January of next year. g. The income tax expense is $5,000. Payment of income tax will be made next year. Required: 1. What adjusting entry for each item (a) through (g) should Jay record at December 31? 2. Prepare a corrected income statement for the current year including earnings per share. Assume that 7,400 shares of stock are outstanding all year. 3. Compute the total asset turnover ratio based on the corrected information. Assume the beginning-of-the-year balance for Jay's total assets was $58,220 and its ending balance for total assets was $65,380. Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 What adjusting entry for each item (a) through (g) should Jay record at December 31? Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 Salaries and wages for the last three days of December amounting to $670 were not recorded or paid. Note: Enter debits before credits. Transaction a. General Journal Debit Credit Record entry View general journal Clear entry > Show less▲

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 3RE: Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that...

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