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The payment was for 6 months rent of Sally Corporations headquarters, beginning
on
November 1.
Sally Corporations accounting year ends on December 31.
Instructions
Analyze the five preceding cases individually and determine the following:
a. The type of adjusting entry needed at year-end (Use the following codes: A,
adjustment of a prepaid expense; B, adjustment of an unearned revenue; C,
adjustment to record an accrued expense; or D, adjustment to record an accrued
revenue.)
b. The year-end journal entry to adjust the accounts
c. The income statement impact of each adjustment (e.g., increases total revenues by
$500)
4. Adjusting entries. You have been retained to examine the records of Marys Day
Care Center as of December 31, 20X3, the close of the current reporting period. In
the course of your examination, you discover the following:
On January 1, 20X3, the Supplies account had a balance of $1,350. During the year,
$5,520 worth of supplies was purchased, and a balance of $1,620 remained unused
on December 31.
Unrecorded interest owed to the center totaled $275 as of December 31.
All clients pay tuition in advance, and their payments are credited to the Unearned
Tuition Revenue account. The account was credited for $65,500 on August 31. With
the exception of $15,500 all amounts were for the current semester ending on
December 31.
Depreciation on the schools van was $3,000 for the year.
On August 1, the center began to pay rent in 6-month installments of $24,000. Mary
wrote a check to the owner of the building and recorded the check in Prepaid Rent, a
new account.
Two salaried employees earn $400 each for a 5-day week. The employees are paid
every Friday, and December 31 falls on a Thursday.
Kathys Day Care paid insurance premiums as follows, each time debiting Prepaid
Insurance:
Date Paid Policy No. Length of Policy Amount
Feb. 1, 20X2 1033MCM19 1 year $540
Jan. 1, 20X3 7952789HP 1 year 912
Aug. 1, 20X3 XQ943675ST 2 years 840
Instructions
The centers accounts were last adjusted on December 31, 20X2. Prepare the
adjusting entries necessary
under the accrual basis of accounting.ACC205: Principles of Accounting I
5. Bank reconciliation and entries. The following information was taken from the
accounting records of
Palmetto Company for the month of January:
Collected
Under 31 days $5,321,000 99%
31260 days 3,890,000 90
61290 days 1,067,000 80
Over 90 days 2,166,000 60
Assume that no accounts were written off during 20X2.
Instructions
a. Estimate the amount of Uncollectible Accounts as of December 31, 20X2.
b. What is the companys Uncollectible Accounts expense for 20X2?
c. Compute the net realizable value of Accounts Receivable at the end of 20X1 and
20X2.
d. Compute the net realizable value at the end of 20X1 and 20X2 as a percentage of
respective year-end receivables balances. Analyze your findings and comment on the
presidents decision to close the credit evaluation department.
machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine
was estimated to have
a service life of 5 years (25,000 operating hours) and a residual value of $5,000.
During the 5 years of
operations (20X3 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and
5,900 hours,
respectively.
Instructions
a. Compute depreciation for 20X3 20X7 by using the following methods: straight
line, units of output,
and double-declining-balance.
b. On January 1, 20X5, management shortened the remaining service life of the
machine to 15 months.
Assuming use of the straight-line method, compute the companys depreciation
expense for 20X5.
c. Briefly describe what you would have done differently in part (a) if Aussie Imports
had paid $47,800
for the machinery rather than $50,000 In addition, assume that the company
incurred $800 of freight
charges $1,400 for machine setup and testing, and $300 for insurance during the
first year of use.
ACC 205 Week 4 Individual Assignment P7-31A, P8-32A, P8-26A, P827A, P7-27A(ASH)
Liability. Please complete each of the exercises below in a word document. Save the
document, and
submit it in the appropriate week using the Assignment Submission button.
1. Payroll accounting. Assume that the following tax rates and payroll information
pertain to Brookhaven
Publishing:
Social Security taxes: 6% on the first $55,000 earned per employee
Medicare taxes: 1.5% on the first $130,000 earned per employee
Federal income taxes withheld from wages: $7,500
State income taxes: 4% of gross earnings
Insurance withholdings: 1% of gross earnings
State unemployment taxes: 5.4% on the first $7,000 earned per employee
Federal unemployment taxes: 0.8% on the first $7,000 earned per employee
The company incurred a salary expense of $50,000 during February. All employees
had earned
less than $5,000 by month-end and no wages have been paid during the month.
a. Prepare the necessary entry to record Brookhavens February payroll. The entry
will
include deductions for the following:
Social Security taxes
Medicare taxes
Federal income taxes withheld
State income taxes
Insurance
b. Prepare the journal entry to record Brookhavens payroll tax expense. The entry
will
include the following:
Matching Social Security taxes
Matching Medicare taxes
State unemployment taxes
Federal unemployment taxes
2. Current liabilities: entries and disclosure. A review of selected financial activities of
Viscontis
during 20XX disclosed the following:
Instructions
a. Prepare journal entries to record the transactions.
b. Prepare adjusting entries on December 31 to record accrued interest.
c. Prepare the Current Liability section of Red Banks balance sheet as of December
31. Assume
that the Accounts Payable account totals $203,600 on this date.
3. Notes payable. Red Bank Enterprises was involved in the following transactions
during the fiscal
year ending October 31:
8/2: Borrowed $55,000 from the Bank of Kingsville by signing a 90-day, 12% note.
12/1 Borrowed $10,000 from the First City Bank by signing a 3- month, 15% note
payable.
Interest and principal are due at maturity.
2/10 Established a warranty liability for the XY-80, a new product. Sales are
expected to total
1,000 units during the month. Past experience with similar products indicates that
3% of
the units will require repair, with warranty costs averaging $27 per unit (parts only).
12/22 Purchased $16,000 of merchandise on account from Oregon Company, terms
2/10, n/30.
12/26 Borrowed $5,000 from First City Bank; signed a 15% note payable due in 60
days.
(Assume 360 day year for interest)
12/31 Repaired six XY-80s during the month at a total cost of $162.
12/31 Accrued 3 days of salaries at a total cost of $1,400.
8/20: Issued a $50,000 note to Harris Motors for the purchase of a $50,000 delivery
truck. The
note is due in 180 days and carries a 12% interest rate.
9/10: Purchased merchandise from Pans Enterprises in the amount of $15,000.
Issued a 30-
Financial Ratios. Please complete each of the exercises below in a word document.
Save the document,
and submit it in the appropriate week using the Assignment Submission button.
1. Liquidity Ratios. Edison, Stagg, and Thornton have the following financial
information at the close of business on July 10:
Edison Stagg Thornton
Cash $6,000 $5,000 $4,000
Short-term investments 3,000 2,500 2,000
Accounts receivable 2,000 2,500 3,000
Inventory 1,000 2,500 4,000
Prepaid expenses 800 800 800
Accounts payable 200 200 200
Notes payable: short-term 3,100 3,100 3,100
Accrued payables 300 300 300
Long-term liabilities 3,800 3,800 3,800
Instructions
a. Compute the current and quick ratios for each of the three companies. (Round
calculations to two
decimal places.) Which firm is the most liquid? Why?
2. Computation and evaluation of activity ratios. The following data relate to Alaska
Products, Inc.:
20X5 20X4
Net credit sales $832,000 $760,000
Cost of goods sold 530,000 400,000
Cash, Dec. 31 125,000 110,000
Accounts receivable, Dec. 31 205,000 156,000
Average Inventory, Dec. 31 70,000 50,000
Accounts payable, Dec. 31 115,000 108,000
Instructions
a. Compute the accounts receivable and inventory turnover ratios for 20X5. Alaska
rounds all
calculations to two decimal places
3. Profitability ratios, trading on the equity
Digital Relay has both preferred and common stock outstanding. The company
reported the following
information for 20X7:
Net sales $1,750,000
Interest expense 120,000
Income tax expense 80,000
ACC 205 Week 5 Indivudal Assignment P10-18A ,E9-24, E9-21, P928A, P10-15A(ASH)
ACC 205 Week 5 Indivudal Assignment P10-18A ,E9-24, E9-21, P9-28A, P1015A