Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment. The adjustment entry for accrued salaries on December 31.

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Answer 1

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

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Prepare correcting entries as of December 31, 2020 7. The delivery expense of P 1,800 incurred on October 1, 2020 was debited to delivery equipment account. Delivery equipment is being depreciated at an annual rate of 12%. 8. Accrued rent expenses were overlooked at the end of 2018, P 2,470; at the end of 2019 of P 3,450; and at the end of 2020, P 5,000. 9. As a result of errors in the physical count, inventories were overlooked by P 24,500 at December 31, 2019 and by P 27,650 at December 31, 2020. 10. On July 1, 2020, fully depreciated equipment purchased for P 21,000, was sold as scrap for P 2,500. The only entry made was to debit cash and credit delivery equipment for the scrap proceeds. 11. Advance payment of a customer in 2019 for goods to be delivered in 2020 of P 5,000. The payment was credited to accounts receivable. 12. Purchases of merchandise in 2020, FOB destination, P 24,000, were taken up in the books in 2020. This was not included in the December 31,…

On December 1, 2019, an advance rent payment of $25,800, representing a three-month prepayment for the months of December, January, and February, was received in cash from the company’s tenant. Required: Use the horizontal model (or write the journal entries) to record the effects of the following items: a. The three months of rent collected in advance on December 1, 2019. b. The adjustment that will be made at the end of each month to show the amount of rent “earned” during the month.

During the last week of 2020, Grandma’s House Inc. received a $96,000 prepayment for 2021 rent of a building from one of its tenants, Red-Riding-Hood. Grandma’s House recorded the receipt as rent revenue. The error was discovered midway through 2021. What journal entry should Grandma’s House record in 2021 to correct the error? Group of answer choices dr. Rent Expense $48,000; cr. Revenue $48,000. dr. Deferred Revenue $96,000; cr. Revenue $96,000. dr. Retained earnings $96,000; cr. Revenue $96,000. None of the options listed. dr. Retained earnings $96,000; cr. Deferred revenue $48,000; cr. Revenue $48,000.

Answer 2

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

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Answer 3

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

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Answer 4

Question

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

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Answer 5

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Answer 6

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

Answer 7

Chapter 3, Problem 3.16SE

1.

To determine

Concept Introduction:

Deferred expense: The advance payments for future expenses, when a business prepays an expense it can debit an asset account and defer the recognition of the expense are a deferred expense. Deferring an expense creates an asset, thus the account is debited to recognize this prepayment.

The adjustment entry for accrued salaries on December 31.

Answer 8

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Answer 9

2.

To determine

Concept Introduction:

Adjusting entries: The entries are recorded at the end of the accounting period and record revenues to the period in which they are earned and expenses to the period in which they occur. Adjustment entries also update assets and liabilities. Adjustment entries are also required to present true and fair financial statements.

The adjustment entry to record earning of revenue.

Answer 10

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Answer 11

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Answer 12

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Answer 13

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