24th Edition

ISBN: 9781259916960

Author: Wild, John J., Shaw, Ken W.

Publisher: Mcgraw-hill Education,

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

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Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

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Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

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Textbook Question

Chapter 3, Problem 12E

Exercise 3-11
Adjusting for prepaid recorded as expenses and unearned revenues recorded as revenues.
P4

Ricardo Construction began operations on December 1. In setting up its accounting procedures, the company decided to debit expense accounts when it prepays its expenses and to credit revenue accounts when customers pay for services in advance. Prepare journal entries for items a through d and the adjusting entries as of its December31 period-end for items e through g. (Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Interest Receivable; Supplies; Prepaid Insurance; Unearned Remodelling Fees; Remodelling Fees Earned; Supplies Expense; Insurance Expense; Interest Expense.)
a. Supplies are purchased on December 1 for $2,000 cash.
b. The company prepaid its insurance premiums for $1,540 cash on December 2.
C. On December 15, the company receives an advance payment of $13,000 cash from a customer for remodelling work.
d. On December 28, the company receives $3,700 cash from another customer for remodelling work to be performed in January.
e. A physical count on December31 indicates that the Company has S1,84o of supplies available.
f. An analysis of the insurance policies in effect on December 31 shows that S340 of insurance coverage had expired,
g. As of December 31, only one remodelling project has been worked on and completed. The $5,570 fee for this project had been received in advance and recorded as remodelling fees earned.
Check (f) Cr. Insurance Expense, $1200
(g)Dr Remodelling Fees Earned, $11,130

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Chapter 3, Problem 11E

Chapter 3, Problem 13E

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Chapter 3 Solutions

Fundamental Accounting Principles

Ch. 3 - Prob. 1DQ Ch. 3 - Why is the accrual basis of accounting generally...Ch. 3 - Prob. 3DQ Ch. 3 - What is a prepaid expense and where is it reported...Ch. 3 - What type of assets requires adjusting entries to...Ch. 3 - 6. What contra account is used when recording and...Ch. 3 - What is an accrued revenue? Give an example..Ch. 3 - 8. If a company initially records prepaid expenses...Ch. 3 - Review the balance sheet of Apple in Appendix À....Ch. 3 - Prob. 10DQ

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