Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 3, Problem 1P
- 1. Salaries accrued but unpaid total $2,840 on December 31.
- 2. The $247 December utility bill arrived on December 31 and has not been paid or recorded.
- 3. Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be
depreciated ; equipment with a cost of $44,000, 8-year life, and $2,000 residual value is also to be depreciated. The straight line method is to be used. - 4. A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Office Supplies account reduced by $397 for supplies used during the year.
- 5. The company holds a $6,000, 12% (annual rate), 6 month note receivable dated September 30, from a customer. The interest is to be collected on the maturity date.
- 6.
Bad debts expense is estimated to be 1% of annual sales. Sales total $65,000. - 7. An analysis of the company insurance policies indicates that the Prepaid Insurance account is to be reduced for $528 of expired insurance.
- 8. A review of travel expense reports indicates that $310 has been paid for airfare for a salesperson (and recorded as Travel Expenses), but has not yet been used.
- 9. The income tax rate is 30% on current income and will be paid in the first quarter of next year. The pretax income of the company before adjustments is $18,270.
Required:
Journalize the necessary year-end adjusting entries for Drake. Show supporting calculations in your
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The following information is available for Drake Company, which adjusts and closes its accounts every December 31:
1.
Salaries accrued but unpaid total $2,840 on December 31.
2.
The $247 December utility bill arrived on December 31 and has not been paid or recorded.
3.
Buildings with a cost of $78,000, 25-year life, and $9,000 residual value are to be depreciated; equipment with a cost of $44,000, 8-year life, and $2,000 residual value is also to be depreciated. The straight-line method is to be used.
4.
A count of supplies indicates that the Store Supplies account should be reduced by $128 and the Office Supplies account reduced by $397 for supplies used during the year.
5.
The company holds a $6,000, 12% (annual rate), 6-month note receivable dated September 30, from a customer. The interest is to be collected on the maturity date.
6.
Bad debts expense is estimated to be 1% of annual sales. Sales total $65,000.
7.
An analysis of the company insurance policies…
Your examination of Sullivan Company’s records provides the following information for the December 31, year－end adjustments: 1. Bad debts are to be recorded at 2% of sales. Sales made on credit totaled $25,000 for the year. 2. Salaries at year-end that have accumulated but have not been paid total $1,400. 3. Annual straight-line depreciation for the company’s equipment is based on a cost of $30,000, an estimated life of 8 years, and an estimated residual value of $2,000. 4. Prepaid insurance in the amount of $800 has expired. 5. Interest that has been earned but not collected totals $500. 6. The company has satisfied performance obligations entitling it to rent…
Wolfpack Corp. has determined it should record depreciation expense of $40,000 for the year ending 12/31/X7.
Required: In the general journal below, complete the year-end entry to record depreciation.
Debit
Credit
Dec 31
?
40,000
?
40,000
Chapter 3 Solutions
Intermediate Accounting: Reporting And Analysis
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