Intermediate Accounting, 10 Ed
10th Edition
ISBN: 9781260310177
Author: Mark W. Nelson, Wayne B. Thomas J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 2, Problem 2.6BE
• LO2–4, LO2–5
If the adjusting entries prepared in BE 2–5 were not recorded, would net income be higher or lower and by how much?
BE 2–4
• LO2–2
Prepare journal entries for each of the following transactions for a company that has a fiscal year-end of December 31: (1) on October 1, $12,000 was paid for a one-year fire insurance policy; (2) on June 30 the company lent its chief financial officer $10,000; principal and interest at 6% are due in one year; and (3) equipment costing $60,000 was purchased at the beginning of the year for cash.
BE 2–5
Adjusting entries
• LO2–5
Prepare the necessary adjusting entries at December 31 for each of the items listed in BE 2–4. Depreciation on the equipment is $12,000 per year.
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Required information
Exercise 5-19 (Algo) Prepaid expenses—insurance LO 10
Skip to question
[The following information applies to the questions displayed below.]
A company makes the payment of a one-year insurance premium of $4,440 on March 1, 2019.
Exercise 5-19 (Algo) Part e
e. Accounting for prepaid expenses achieves a better matching of revenues and expenses and yields a more meaningful measure of net income.
true or false
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Week 6 HW.docx
Q1. The balance in the unearned rent account for Jones Co. as of
December 31 is $1,200. If Jones Co. failed to record the
adjusting entry for $600 of rent earned during December, the
effect on the balance sheet and income statement for December
would be:
A. Assets understated by $600; net income overstated by
$600.
B. Liabilities understated by $600; net income understated by
$600.
C. Liabilities overstated by $600; net income understated by
$600.
D. Liabilities overstated by $600; net income overstated by
$600.
Q2. Would AT&T (T) and Microsoft (MSFT) use the cash basis
or the accrual basis of accounting? Explain.
Q3. Why are adjustments needed at the end of an accounting
period?
Q4. Describe the nature of the assets that compose the following
sections of a balance sheet:
a. Balance
Sheet:
b. Property, Plant, and
Equipment:
12
000
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Required information
Exercise 5-19 (Algo) Prepaid expenses—insurance LO 10
Skip to question
[The following information applies to the questions displayed below.]
A company makes the payment of a one-year insurance premium of $4,440 on March 1, 2019.
Exercise 5-19 (Algo) Part d
d. If the premium had been $8,880 for a two-year period, how should the prepaid amount at December 31, 2019, be reported on the balance sheet?
Chapter 2 Solutions
Intermediate Accounting, 10 Ed
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Prob. 2.12BECh. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Prob. 2.7ECh. 2 - Prob. 2.8ECh. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.24ECh. 2 - Prob. 2.3PCh. 2 - Prob. 2.4PCh. 2 - Prob. 2.8PCh. 2 - Prob. 2.12PCh. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Prob. 2.1DA
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