The following are several transactions of Ardery Company that occurred during the current year and were recorded in permanent (that is, balance sheet) accounts unless indicated otherwise. Date Transaction Apr. 1 Purchased a delivery van for $20,000, paying $1,000 down, and issuing a 1-year, 6% note payable for the $19,000 balance. It is estimated that the van has a 4-year life and an $800 residual value; the company uses straight-line depreciation. The interest on the note will be paid on the maturity date. May 15 Purchased $800 of office supplies. June 2 Purchased a 2-year comprehensive insurance policy for $720. Aug. 1 Received 6 months' rent in advance at $300 per month and recorded the $1,800 receipt as Rent Revenue. Sept. 15 Advanced $600 to sales personnel to cover their future travel costs. Nov. 1 Accepted a $4,000, 6-month, 6% (annual rate) note receivable from a customer, the interest to be collected when the note is collected. The following information also is available: 1. On January 1, the Office Supplies account had a $250 balance. On December 31, an inventory count showed $180 of office supplies on hand. 2. The weekly (5-day) payroll of Ardery Company amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day accrual is required for the current year. 3. Sales personnel travel cost reports indicate that $450 of advances had been used to pay travel expenses. 4. The income tax rate is 30% on current income and is payable in the first quarter of next year. The pretax income before the adjusting entries is $8,655. Required: On the basis of the above information, prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31.
The following are several transactions of Ardery Company that occurred during the current year and were recorded in permanent (that is, balance sheet) accounts unless indicated otherwise. Date Transaction Apr. 1 Purchased a delivery van for $20,000, paying $1,000 down, and issuing a 1-year, 6% note payable for the $19,000 balance. It is estimated that the van has a 4-year life and an $800 residual value; the company uses straight-line depreciation. The interest on the note will be paid on the maturity date. May 15 Purchased $800 of office supplies. June 2 Purchased a 2-year comprehensive insurance policy for $720. Aug. 1 Received 6 months' rent in advance at $300 per month and recorded the $1,800 receipt as Rent Revenue. Sept. 15 Advanced $600 to sales personnel to cover their future travel costs. Nov. 1 Accepted a $4,000, 6-month, 6% (annual rate) note receivable from a customer, the interest to be collected when the note is collected. The following information also is available: 1. On January 1, the Office Supplies account had a $250 balance. On December 31, an inventory count showed $180 of office supplies on hand. 2. The weekly (5-day) payroll of Ardery Company amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day accrual is required for the current year. 3. Sales personnel travel cost reports indicate that $450 of advances had been used to pay travel expenses. 4. The income tax rate is 30% on current income and is payable in the first quarter of next year. The pretax income before the adjusting entries is $8,655. Required: On the basis of the above information, prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31.
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
Chapter6: Cash And Receivables
Section: Chapter Questions
Problem 10RE: On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to...
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Question
The following are several transactions of Ardery Company that occurred during the current year and were recorded in permanent (that is, balance sheet ) accounts unless indicated otherwise.
Date
Transaction
Apr. 1 Purchased a delivery van for $20,000, paying $1,000 down, and issuing a 1-year, 6% note payable for the $19,000 balance. It is estimated that the van has a 4-year life and an $800 residual value; the company uses straight-line depreciation. The interest on the note will be paid on the maturity date.
May 15 Purchased $800 of office supplies.
June 2 Purchased a 2-year comprehensive insurance policy for $720.
Aug. 1 Received 6 months' rent in advance at $300 per month and recorded the $1,800 receipt as Rent Revenue.
Sept. 15 Advanced $600 to sales personnel to cover their future travel costs.
Nov. 1 Accepted a $4,000, 6-month, 6% (annual rate) note receivable from a customer, the interest to be collected when the note is collected.
The following information also is available:
1. On January 1, the Office Supplies account had a $250 balance. On December 31, an inventory count showed $180 of office supplies on hand.
2. The weekly (5-day) payroll of Ardery Company amounts to $2,000. All employees are paid at the close of business each Wednesday. A 2-day accrual is required for the current year.
3. Sales personnel travel cost reports indicate that $450 of advances had been used to pay travel expenses.
4. The income tax rate is 30% on current income and is payable in the first quarter of next year. The pretax income before the adjusting entries is $8,655.
Required:
On the basis of the above information, prepare journal entries to record whatever adjustments are necessary to bring the accounts up to date on December 31.
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