Concept explainers
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To prepare:
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Adjusting entries are those entries which are made at the end of the accounting period, to record the revenues in the period of which they have been earned and to record the expenses in the period of which have been incurred, as well as to update all the balances of assets and liabilities accounts on the balance sheet, and to ascertain accurate amount of net income (loss) on the income statement to maintain the records according to the accrual basis principle.
Accounting rules for journal/adjusting entries:
- To record increase balance of account: Debit assets, expenses, losses and credit liabilities, capital, revenue and gains.
- To record decrease balance of account: Credit assets, expenses, losses and debit liabilities, capital, revenue and gains.
To prepare: Adjusting entries to record the earnings of $9,000, for which collection was made in advance.
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To
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Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
- A. More Review Show (MRS) prepares quarterly statements. Thebookkeeper presented to you the records and you found out the following account balancesbefore adjustments for the quarter ended March 31, 200B:1. The notes receivable balance of P180,000 as of March 31, 200B consisted of a 60-day 12% note for P120,000 dated February 14, 200B and a 30-day 6% note for P60,000 dated March 16, 200B2. The balance of the prepaid insurance account of P22,000 represents a one-year policycontracted last November 1, 200A for P10,000 and a two-year policy contracted last July 1, 200A for P12,0003. The balance of the prepaid rent account of P50,000 pertains to advance rent paid lastDecember 1, 200A six months effective on the same date.4. The rate per day for each of the four shop workers is P350. MRS pays the weekly salaries of its workers every Monday of the following week ( a week consisting of five days from Monday to Friday). March 31, 200B falls on Thursday.5. Mortgage notes payable had a credit…arrow_forwardRefer to RE6-8. On April 23, 2020, McKinncy Co. receives a check, from Mangold Corporation for 8,500. Prepare the journal entry for McKinncy to record the collection of the account previously written off.arrow_forwardUNCOLLECTIBLE ACCOUNTSALLOWANCE METHOD Pyle Nurseries used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20--. REQUIRED 1. Open the three selected general ledger accounts. 2. Enter the transactions and the adjusting and closing entries in a general journal (page 6). After each entry, post to the appropriate selected accounts. 3. Determine the net realizable value as of December 31.arrow_forward
- UNCOLLECTIBLE ACCOUNTSALLOWANCE METHOD Lewis Warehouse used the allowance method to record the following transactions, adjusting entries, and closing entries during the year ended December 31, 20--: Selected accounts and beginning balances on January 1, 20--, are as follows: REQUIRED 1. Open the three selected general ledger accounts. 2. Enter the transactions and the adjusting and closing entries in a general journal (page 6). After each entry, post to the appropriate selected accounts. 3. Determine the net realizable value as of December 31, 20--.arrow_forwardCatherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardReview the following transactions and prepare any necessary journal entries for Woodworking Magazine. Woodworking Magazine provides one issue per month to subscribers for a service fee of $240 per year. Assume January 1 is the first day of operations for this company, and no new customers join during the year. A. On January 1, Woodworking Magazine receives advance cash payment from forty customers for magazine subscription services. Handyman had yet to provide subscription services as of January 1. B. On April 30, Woodworking recognizes subscription revenues earned. C. On October 31, Woodworking recognizes subscription revenues earned. D. On December 31, Woodworking recognizes subscription revenues earned.arrow_forward
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