Accounting: What the Numbers Mean
11th Edition
ISBN: 9781259535314
Author: David Marshall, Wayne William McManus, Daniel Viele
Publisher: McGraw-Hill Education
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Chapter 7, Problem 7.8E
Exercise 7.8
LO 5
Other accrued liabilities-real estate taxes Glennelle's Boutique, Inc., operates in a city in which real estate tax hills for one year are issued in May of the subsequent year. Thus, tax hills for 2016 are issued in May 2017 and are payable in July 2017.
Required:
- Explain how the amount of tax expense for calendar 2016 and the amount of taxes payable (if any) at December 31, 2016, can be determined.
- Use the horizontal model (or write the
journal entry ) to show the effect of accruing 2016 taxes of $12,800 at December 31, 2016. - Assume that the actual tax bill, received in May 2017, was for $13,600. Use the horizontal model (or write the journal entry) to show the effects of the appropriate adjustment to the amount previously accrued.
- Determine the income statement and balance sheet effects of not accruing 2016 taxes at December 31, 2016 (assuming that taxes in b are not accrued).
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Exercise 7-10 (Static) Other accrued liabilities-real estate taxes LO 7-5
[The following information applies to the questions displayed below.]
Glennelle's Boutique Incorporated operates in a city in which real estate tax bills for one year are issued in May of the
subsequent year. Thus, tax bills for 2022 are issued in May 2023 and are payable in July 2023.
Exercise 7-10 (Static) Part c-Journal entry
-2. Assume that the actual tax bill, received in May 2023, was for $47,600. Record the journal entry to show the effects of the
appropriate adjustment to the amount previously accrued.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
1
No
Event
1
Real estate tax expense
Real estate taxes payable
Cash
Answer is not complete.
General Journal
Debit
Credit
44,800 ×
2,800
47,600
Other accrued liabilities—real estate taxes Glennelle’s Boutique Inc. operates in a city in which real estate tax bills for one year are issued in May of the subsequent year. Thus, tax bills for 2019 are issued in May 2020 and are payable in July 2020.
Required:
Explain how the amount of tax expense for calendar 2019 and the amount of taxes payable (if any) at December 31, 2019, can be determined.
Use the horizontal model (or write the journal entry) to show the effect of accruing 2019 taxes of $44,800 at December 31, 2019.
Assume that the actual tax bill, received in May 2020, was for $47,600. Use the horizontal model (or write the journal entry) to show the effects of the appropriate adjustment to the amount previously accrued.
page 263 Determine the income statement and balance sheet effects of not accruing 2019 taxes at December 31, 2019 (assuming that taxes in b are not accrued).
Problem #5
Accrual of Interest Revenue
Melinda Almazan, an angel investor, decided to invest P1,200,000 excess cash in
certificate of deposit on April 1, 2019. The certificate carried an 8% annual rate
interest and a 1-year term to maturity. Interest will be withdrawn monthly (disregard
tax effects).
1.
Required:
1.
What amount of income will be recognized for the year ending Dec. 31, 2019?
2.
What is the effect of the adjusting entry on the accounting equation?
3. What amount of cash will be collected for interest revenue in 2019?
4. What is the amount of interest receivable as of Dec. 31, 2019?
5. What amount of cash will be collected for interest revenue in 2020?
6. What amount of interest revenue will be recognized in 2020?
7. What is the amount of interest receivable as of Dec. 31, 2020?
Chapter 7 Solutions
Accounting: What the Numbers Mean
Ch. 7 - Prob. 7.1MECh. 7 - Mini-Exercise 7.2 LO 4 Other accrued...Ch. 7 - Mini-Exercise 7.3 LO 5 Other accrued...Ch. 7 - Prob. 7.4MECh. 7 - Exercise 7.5 LO 2 Notes payable-discount basis On...Ch. 7 - Prob. 7.6ECh. 7 - Exercise 7.7 LO 4 Other accrued...Ch. 7 - Exercise 7.8 LO 5 Other accrued liabilities-real...Ch. 7 - Exercise 7.9 LO 5 Other accrued...Ch. 7 - Exercise 7.10 LO 5 Other accrued...
Ch. 7 - Exercise 7.11 LO 3 Unearned revenues-customer...Ch. 7 - Exercise 7.12 LO 3 Unearned revenues-ticket sales...Ch. 7 - Prob. 7.13ECh. 7 - Prob. 7.14ECh. 7 - Prob. 7.15ECh. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.20ECh. 7 - Exercise 7.21 LO 4. 5, 8 Transaction...Ch. 7 - Prob. 7.22ECh. 7 - Prob. 7.23ECh. 7 - Prob. 7.24ECh. 7 - Prob. 7.25PCh. 7 - Problem 7.26 LO 3 Unearned revenues-subscription...Ch. 7 - Prob. 7.27PCh. 7 - Prob. 7.28PCh. 7 - Prob. 7.29PCh. 7 - Prob. 7.30PCh. 7 - Prob. 7.31PCh. 7 - Prob. 7.32PCh. 7 - Prob. 7.33CCh. 7 - Prob. 7.34CCh. 7 - Prob. 7.35C
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