Using Financial Accounting Information
10th Edition
ISBN: 9781337276337
Author: Porter, Gary A.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 4, Problem 4.2.2P
To determine
Introduction: Each financial transaction or economic event will affect either assets, liabilities, or owners’ equity. Thus, the basis for recording the transaction in the accounting system depends on the
Adjustments: Accrual basis accounting requires a number of adjustments at the end of the period. The adjustment is made for unearned revenue, accrued expenses, revenue received in advance and prepaid expenses.
The necessary adjustments for each of the preceding situations on December 31, 2017.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Swifty Corporation owns equipment that cost $70,800 when purchased on April 1, 2013. Depreciation has been recorded at a rate of
$11,800 per year, resulting in a balance in accumulated depreciation of $56,050 at December 31, 2017. The equipment is sold on July
1, 2018, for $14,160.
Prepare journal entries to (a) update depreciation for 2018 and (b) record the sale. (Credit account titles are automatically indented when
amount is entered. Do not indent manually.)
No. Account Titles and Explanation
Debit
Credit
(a)
(b)
Prepare journal entries to record the following transactions. You are required to show all calculations: 3.1 The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000. 3.2 The allowance for credit losses account has an opening balance of R4 500. The policy requires the allowance to equate 8% of the total accounts receivable. The debtors sub-ledger totaled R52 000 prior receiving 40c in the rand on an account of R3 000. The financial manager instructed the write off on the balance.
Prepare journal entries to record the following transactions. You are required to show all calculations: the financial year-end of the client is 30 November 2021.
3.1
The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000.
3.2
The allowance for credit losses account has an opening balance of R4 500. The policy requires the allowance to equate 8% of the total accounts receivable. The debtors sub-ledger totaled R52 000 prior receiving 40c in the rand on an account of R3 000. The financial manager instructed the write off on the balance WITH GENERAL LEDGER ENTERIES:
Please dont provide answer in image format thnku
Chapter 4 Solutions
Using Financial Accounting Information
Ch. 4 - Revenue Recognition The highway department...Ch. 4 - Prob. 4.2.1ECh. 4 - Prob. 4.2.2ECh. 4 - Prob. 4.2.3ECh. 4 - Prob. 4.3ECh. 4 - Prob. 4.4ECh. 4 - Prob. 4.5ECh. 4 - Prob. 4.6.1ECh. 4 - Prob. 4.6.2ECh. 4 - Prob. 4.6.3E
Ch. 4 - Prob. 4.6.4ECh. 4 - Prob. 4.7.1ECh. 4 - Prob. 4.7.2ECh. 4 - Prob. 4.8.1ECh. 4 - Prob. 4.8.2ECh. 4 - Prob. 4.8.3ECh. 4 - Prob. 4.8.4ECh. 4 - Prob. 4.8.5ECh. 4 - Prob. 4.9.1ECh. 4 - Working Backward: Depreciation Polk Corp....Ch. 4 - Prob. 4.10.1ECh. 4 - Prob. 4.10.2ECh. 4 - Prob. 4.10.3ECh. 4 - Prob. 4.10.4ECh. 4 - Prob. 4.11.1ECh. 4 - Prob. 4.11.2ECh. 4 - Prob. 4.11.3ECh. 4 - Prob. 4.12.1ECh. 4 - Prob. 4.12.2ECh. 4 - Prob. 4.12.3ECh. 4 - Prob. 4.13.1ECh. 4 - Prob. 4.13.2ECh. 4 - Prob. 4.13.3ECh. 4 - Prob. 4.14ECh. 4 - Prob. 4.15.1ECh. 4 - Prob. 4.15.2ECh. 4 - Prob. 4.15.3ECh. 4 - Prob. 4.15.4ECh. 4 - Prob. 4.15.5ECh. 4 - Prob. 4.16.1ECh. 4 - Prob. 4.16.2ECh. 4 - Prob. 4.16.3ECh. 4 - Prob. 4.17.1ECh. 4 - Prob. 4.17.2ECh. 4 - Prob. 4.18.1ECh. 4 - Prob. 4.18.2ECh. 4 - Prob. 4.18.3ECh. 4 - Prob. 4.19.1ECh. 4 - Prob. 4.19.2ECh. 4 - Prob. 4.20.1ECh. 4 - Prob. 4.20.2ECh. 4 - Prob. 4.20.3ECh. 4 - Prob. 4.21.1ECh. 4 - Prob. 4.21.2ECh. 4 - Prob. 4.22ECh. 4 - The Effect of Ignoring Adjustments on Net Income...Ch. 4 - Prob. 4.24ECh. 4 - Prob. 4.25ECh. 4 - Prob. 4.26.1MCECh. 4 - Prob. 4.26.2MCECh. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Depreciation Expense During 2017, Carter Company...Ch. 4 - Prob. 4.28.1MCECh. 4 - Prob. 4.28.2MCECh. 4 - Prob. 4.1.1PCh. 4 - Prob. 4.1.2PCh. 4 - Prob. 4.2.1PCh. 4 - Prob. 4.2.2PCh. 4 - Prob. 4.3PCh. 4 - Prob. 4.4.1PCh. 4 - Prob. 4.4.2PCh. 4 - Prob. 4.5.1PCh. 4 - Prob. 4.5.2PCh. 4 - Prob. 4.5.3PCh. 4 - Prob. 4.6.1PCh. 4 - Prob. 4.6.2PCh. 4 - Prob. 4.6.3PCh. 4 - Prob. 4.6.4PCh. 4 - Prob. 4.6.5PCh. 4 - Prob. 4.6.6PCh. 4 - Prob. 4.7.1PCh. 4 - Prob. 4.7.2PCh. 4 - Prob. 4.8MCPCh. 4 - Prob. 4.9.1MCPCh. 4 - Prob. 4.9.2MCPCh. 4 - Monthly Transactions, Adjustments, and Financial...Ch. 4 - Prob. 4.9.4MCPCh. 4 - Prob. 4.9.5MCPCh. 4 - Prob. 4.1.1AAPCh. 4 - Prob. 4.1.2AAPCh. 4 - Prob. 4.2.1AAPCh. 4 - Prob. 4.2.2AAPCh. 4 - Prob. 4.3AAPCh. 4 - Use of Account Balances as a Basis for Annual...Ch. 4 - Prob. 4.4.2AAPCh. 4 - Prob. 4.5.1AAPCh. 4 - Prob. 4.5.2AAPCh. 4 - Prob. 4.6.1AAPCh. 4 - Prob. 4.6.2AAPCh. 4 - Prob. 4.6.3AAPCh. 4 - Prob. 4.6.4AAPCh. 4 - Prob. 4.6.5AAPCh. 4 - Prob. 4.6.6AAPCh. 4 - Prob. 4.7.1AAPCh. 4 - Prob. 4.7.2AAPCh. 4 - Prob. 4.8AAMCPCh. 4 - Prob. 4.9.1AAMCPCh. 4 - Prob. 4.9.2AAMCPCh. 4 - Prob. 4.9.3AAMCPCh. 4 - Prob. 4.9.4AAMCP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Rahman Company, a manufacturer of steel products, began operations on January 1, 2020. Rahman has a December 31 fiscal year-end and adjusts its accounts annually. Selected transactions related to its Brampton plant are as follows: Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. Dec. 31, 2021 Recorded depreciation at year end. Jan. 1, 2022 One (1) stamping machine was sold for $1,250. . Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000.…arrow_forwardMarigold Corporation owns equipment that cost $52,800 when purchased on April 1, 2013. Depreciation has been recorded at a rate of $8,800 per year, resulting in a balance in accumulated depreciation of $41,800 at December 31, 2017. The equipment is sold on July 1, 2018, for $10,560.Prepare journal entries to (a) update depreciation for 2018 and (b) record the sale. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit (a) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount (b) enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount enter an account titlearrow_forwardOn July 1, 2017, Snow Corp purchases a sleigh (property, plant, and equipment) and agrees to make 10 payments of $6,790 due on December 31 of each year. The annual market interest rate for the note is 5%. All adjusting journal entries are recorded on December 31. Assume that Snow Corp uses the double- declining method to record depreciation. The sleigh is estimated to have a useful life of 20 years and a salvage value of $700. Use the above information to answer the following questions. Round your answer to 2 decimal places. Present value of a single sum for 5 periods Present value of a single sum for 10 periods Present value of an annuity for 5 periods Present value of an annuity for 10 periods 2.5% .88385 78120 4.64583 8.75206 3.0% .86261 .74409 4.57971 8.53020 5.0% .78353 .61391 4.32948 7.72173 6.0% .74726 .55839 4.21236 7.36009 What is the journal entry(ies) recorded by Snow Corp on July 1, 2017? Write "NONE" if no journal entry is required.arrow_forward
- On September 1, 2015, Johnas, Inc. acquired a patent for $600,000. The patent has 16 years remaining in its legal life. However, Johnas, Inc. expects the patent's technology to have a useful life of 8 years. Prepare the journal entries to record the acquisition of the patent and the amortization expense for 2015. Date Account Debit Creditarrow_forwardThe following information relates to a company which prepares financial statements to 31st December each year: (a) On 1st January 2017, the company acquired new plant costing Ghs10million. This plant will require a complete overhaul after five years of use, at an estimated cost of Ghs1million. Accordingly, the company wishes to make a provision of Ghs200,000 for plant overhaul costs in its financial statement for the year to 31st December 2017 and then to increase this provision by Ghs200,000 every year for the next four years. This will have the effect of spreading the overhaul costs yearly over the years 2017 to 2021. (b) On 31st December 2017, the company moved from leased premises into new freehold premises. The lease on the old premises will continue for three more years at an annual cost of Ghs100,000. The lease cannot be cancelled and the premises cannot be sublet or used for any other purpose. The company wishes to make a provision of Ghs300,000 in its financial statements for…arrow_forwardRussin Tax Planning Service bought computer equipment for $24,000 on January 1, 2016. It has an estimated useful life of four years and zero residual value. Russin uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. Calculate the amount of Depreciation Expense for the period, January 1, 2016 through September 30, 2016, for this equipment. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)arrow_forward
- Dyke Company's net incomes for the past three years are presented below: 2019 2018 2017 $480,000 $450,000 $360,000 During the 2019 year-end audit, the following items come to your attention: Dyke bought a truck on January 1, 2016 for $196,000 with a $16,000 estimated residual value and a six-year life. The company debited an expense account and credited cash on the purchase date for the entire cost of the asset. (Straight-line method) During 2019, Dyke changed from the straight-line method of depreciating its cement plant to the double-declining balance method. The following computations present depreciation on both bases: 2019 2018 2017 Straight-line 36,000 36,000 36,000 Double-declining 46,080 57,600 72,000 The net income for 2019 was computed…arrow_forwardSwindall Industries uses straight-line depreciation on all of its depreciable assets. The company records annual depreciation expense at the end of each calendar year. On January 11, 2017, the company purchased a machine costing $117,000. The machine's useful life was estimated to be 12 years with an estimated residual value of $17,200. Depreciation for partial years is recorded to the nearest full month. In 2021, after almost five years of experience with the machine, management decided to revise its estimated life from 12 years to 20 years. No change was made in the estimated residual value. The revised estimate of the useful life was decided prior to recording annual depreciation expense for the year ended December 31, 2021. a. Prepare journal entries in chronological order for the given events, beginning with the purchase of the machinery on January 11, 2017. Show separately the recording of depreciation expense in 2017 through 2021. (Do not round intermediate calculations. Round…arrow_forwardBeaver Construction purchases new equipment for $45,360 cash on April 1, 2024. At the time of purchase, the equipment is expected to be used in operations for seven years (84 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 84 months ($540/month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2024 is $0).arrow_forward
- Martinez, Inc. acquired a patent on January 1, 2017 for $41,700 cash. The patent was estimated to have a useful life of 10 years with no residual value. On December 31, 2018, before any adjustments were recorded for the year, management determined that the remaining useful life was 7 years (with that new estimate being effective as of January 1, 2018). On June 30, 2019, the patent was sold for $26,700.Required: Prepare the journal entry to record the acquisition of the patent on January 1, 2017. Prepare the journal entry to record the annual amortization for 2017. Compute the amount of amortization that would be recorded in 2018. Determine the gain (loss) on sale on June 30, 2019. Prepare the journal entry to record the sale of the patent on June 30, 2019.arrow_forwardA company uses straight-line depreciation (round to the nearest whole month) and adjusts its accounts annually on 31 December. On 1 January 2016, A purchased a van for $450,000 which has an estimated useful life of 9 years and no residual value. On 1 January 2021, the company incurred the following expenditure on the van: (i) $1,500 for annual maintenance and servicing (ii) $60,000 to upgrade the van with a new and more powerful engine (iii) $1,000 to paint the van after 5 years of use. On 1 January 2021, the useful life of the van was revised to 13 years with a residual value of $15,000. Required: (a) What is the book value of the van as at 31 December 2020? (b) Journalize annual depreciation of the van on 31 December 2021. Show workings.arrow_forwardOn January 1, 2017, Sheridan Company had a balance of $417,000 of goodwill on its balance sheet that resulted from the purchase of a small business in a prior year. The goodwill had an indefinite life. During 2017 , the company had the following transactionsarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College
The accounting cycle; Author: Alanis Business academy;https://www.youtube.com/watch?v=XTspj8CtzPk;License: Standard YouTube License, CC-BY