Use the following information to answer questions1-5.
The Aggie Graphics Company was organized on January 1, 2017.
The trial balance before adjustment at December 31, 2017contained the following account balances:
Cash $9,500 Accounts Receivable 4,000 Prepaid Insurance 1,800 Equipment 45,000 Accumulated Depreciation 4,500 Accounts Payable 3,500 Notes Payable 18,000 Common Stock 5,000 Retained Earnings 12,000 Dividend 2,000 Graphic Fees Earned 52,100 Consulting Fees Earned 5,000 Salaries Expense 30,000 Supplies Expense 2,700 Advertising Expense 1,900 Rent Expense 1,500 Utilities Expense 1,700 $100,100 $100,100
Analysis reveals the following additional data: (Assume thebooks are only closed at year end)
(A) The $2,700 balance in Supplies Expenserepresents supplies purchased in January. At December31, there was $1,200 of supplies on hand.
(B) The note payable was issued on September1. It is a 3% 6-month note.
(C) The balance in Prepaid Insurance is thepremium paid on a one-year policy, dated March 1, 2017.
(D) Consulting Fees are credited to revenuewhen received. At December 31, consulting fees of $1,000 contractedfor January, 2017 have yet to be performed.
(E) The equipment was purchased on January 1,2017. It has a 10-year useful life and no salvage value.
The entry to record (A) above would include a debit to:(Assume the company is only making one adjusting entry to recordthis information)
A. Supplies for $1,500
B. Supplies for $1,200
C. Supply Expense for $1,200
D. Prepaid Supply Expense for $2,700
1 points
QUESTION 2
What is the balance in the interest payable accountafter adjustment?
A. $ 45
B. $180
C. $90
D. $270
1 points
QUESTION 3
The correct entry to record (E) above is:
A. DepreciationExpense 4,500
AccumulatedDepreciation 4,500
B. DepreciationExpense 9,000
AccumulatedDepreciation 9,000
C. DepreciationExpense 9,000
Equipment 9,000
D. DepreciationExpense 9,000
AccumulatedDepreciation 4,500
Equipment 4,500
Use the following information to answer questions1-5.
The Aggie Graphics Company was organized on January 1, 2017.
The trial balance before adjustment at December 31, 2017contained the following account balances:
| Cash | $9,500 | |
| Accounts Receivable | 4,000 | |
| Prepaid Insurance | 1,800 | |
| Equipment | 45,000 | |
| Accumulated Depreciation | 4,500 | |
| Accounts Payable | 3,500 | |
| Notes Payable | 18,000 | |
| Common Stock | 5,000 | |
| Retained Earnings | 12,000 | |
| Dividend | 2,000 | |
| Graphic Fees Earned | 52,100 | |
| Consulting Fees Earned | 5,000 | |
| Salaries Expense | 30,000 | |
| Supplies Expense | 2,700 | |
| Advertising Expense | 1,900 | |
| Rent Expense | 1,500 | |
| Utilities Expense | 1,700 | |
| $100,100 | $100,100 |
Analysis reveals the following additional data: (Assume thebooks are only closed at year end)
(A) The $2,700 balance in Supplies Expenserepresents supplies purchased in January. At December31, there was $1,200 of supplies on hand.
(B) The note payable was issued on September1. It is a 3% 6-month note.
(C) The balance in Prepaid Insurance is thepremium paid on a one-year policy, dated March 1, 2017.
(D) Consulting Fees are credited to revenuewhen received. At December 31, consulting fees of $1,000 contractedfor January, 2017 have yet to be performed.
(E) The equipment was purchased on January 1,2017. It has a 10-year useful life and no salvage value.
The entry to record (A) above would include a debit to:(Assume the company is only making one adjusting entry to recordthis information)
| A. | Supplies for $1,500 | |
| B. | Supplies for $1,200 | |
| C. | Supply Expense for $1,200 | |
| D. | Prepaid Supply Expense for $2,700 |
1 points
QUESTION 2
What is the balance in the interest payable accountafter adjustment?
| A. | $ 45 | |
| B. | $180 | |
| C. | $90 | |
| D. | $270 |
1 points
QUESTION 3
The correct entry to record (E) above is:
| A. | DepreciationExpense 4,500 AccumulatedDepreciation 4,500 | |
| B. | DepreciationExpense 9,000 AccumulatedDepreciation 9,000 | |
| C. | DepreciationExpense 9,000 Equipment 9,000 | |
| D. | DepreciationExpense 9,000 AccumulatedDepreciation 4,500 Equipment 4,500 | |
Related questions
On May 31, the following data were accumulated to assist theaccountant in preparing the adjusting entries for OceansideRealty:
| a. | Fees accrued but unbilled at May 31are $19,750. |
| b. | The supplies account balance on May31 is $12,300. The supplies on hand at May 31 are $4,150. |
| c. | Wages accrued but not paid at May31 are $2,700. |
| d. | The unearned rent account balanceat May 31 is $9,000, representing the receipt of an advance paymenton May 1 of three monthsâ rent from tenants. |
| e. | Depreciation of office equipment is$3,200. |
| Required: | |
| 1. | Journalize the adjustingentries required at May 31. Refer to the Chart of Accounts forexact wording of account titles. |
| 2. | What is the difference betweenadjusting entries and correcting entries? |
Chart of Accounts
| CHARTOF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oceanside Realty | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Rainmaker Environmental Consultants is just finishing its secondyear of operations. The companyâs unadjusted trial balance atOctober 31, 2011 follows:
Rainmaker Environmental Consultants | ||
Unadjusted Trial Balance | ||
October 31, 2011 | ||
Account | Debit | Credit |
Cash | 28,000 | |
Accounts receivable | 56,000 | |
Interest receivable | 0 | |
Notes receivable | 30,000 | |
Supplies | 4,600 | |
Prepaid insurance | 9,350 | |
Prepaid rent | 21,000 | |
Office furniture | 61,440 | |
Accumulated depreciation, office furniture | 20,480 | |
Accounts payable | 35,000 | |
Wages payable | 0 | |
Unearned consulting fees | 13,160 | |
Jeff Moore, capital | 60,000 | |
Jeff Moore, withdrawals | 16,450 | |
Consulting fees earned | 314,600 | |
Interest revenue | 1,400 | |
Depreciation expense â office furniture | 0 | |
Wages expense | 147,000 | |
Insurance expense | 0 | |
Rent expense | 64,000 | |
Supplies expense | 6,800 | |
Totals | 444,640 | 444,640 |
Rainmaker prepares adjustments each October 31. The followingadditional information is available on October 31, 2011:
a.It was determined that $12,000 ofthe unearned Consulting fees had not yet been earned.
b.It was discovered that $6,000 ofthe balance in consulting fees earned was for services to beperformed in November.
c.The balance in the prepaid rentaccount represented three months of rent beginning September 1,2011.
d.Accrued wages at October 31totaled $6,800.
e.The office furniture waspurchased on March 1, 2010, and has an estimated useful life of twoyears. After two years, it is expected that the furniture will beworthless.
f.Accrued consulting fees atyear-end totaled $4,200.
g.Interest of $200 had accrued onthe note receivable for the month of October.
h.The balance in the prepaidinsurance account represents the remaining balance of a two-yearpolicy purchased on April 1, 2010.
i.A count of the supplies onOctober 31 revealed a balance remaining of $900.
Required
Prepare adjusting journal entries on October 31, 2011 based onthe above.
Terrific Temps fills temporary employment positions for localbusinesses. Some businesses pay in
advance for services; others are billed after services have beenperformed. Advanced payments are
credited to an account entitled Unearned Fees. Adjusting entriesare performed on a monthly basis.
An unadjusted trial balance dated December 31, 2015, follows. (Bearin mind that adjusting entries
have already been made for the first 11 months of 2015, but not forDecember.)
| TERRIFIC TEMPS UNADJUSTED TRIAL BALANCE DECEMBER 31, 2015 | |||||
| Cash | $ | 27,020 | |||
| Accounts receivable | 59,200 | ||||
| Unexpired insurance | 900 | ||||
| Prepaid rent | 3,000 | ||||
| Office supplies | 600 | ||||
| Equipment | 60,000 | ||||
| Accumulated depreciation: equipment | $ | 29,500 | |||
| Accounts payable | 4,180 | ||||
| Notes payable | 12,000 | ||||
| Interest payable | 320 | ||||
| Unearned fees | 6,000 | ||||
| Income taxes payable | 4,000 | ||||
| Unearned revenue | 20,000 | ||||
| Retained earnings | 49,000 | ||||
| Capital stock | 25,000 | ||||
| Dividends | 3,000 | ||||
| Feesearned | 75,000 | ||||
| Travel expense | 5,000 | ||||
| Insurance expense | 2,980 | ||||
| Rentexpense | 9,900 | ||||
| Office supplies expense | 780 | ||||
| Utilities expense | 4,800 | ||||
| Depreciation expense: equipment | 5,500 | ||||
| Salaries expense | 30,000 | ||||
| Interest expense | 320 | ||||
| Income taxes expense | 12,000 | ||||
| $ | 225,000 | $ | 225,000 | ||
| Other Data | |
| 1. | Accrued butunrecorded fees earned as of December 31, 2015, amount to$1,500. |
| 2. | Records showthat $2,500 of cash receipts originally recorded as unearned feeshad been earned as of December 31. |
| 3. | The companypurchased a six-month insurance policy on September 1, 2015, for$1,800. |
| 4. | On December 1,2015, the company paid its rent through February 28, 2016. |
| 5. | Office supplieson hand at December 31 amount to $400. |
| 6. | All equipment was purchased when the business first formed. Theestimated life of the equipment at that time was 10 years (or 120months). |
| 7. | On August 1, 2015, the company borrowed $12,000 by signing asix-month, 8 percent note payable. The entire note, plus sixmonths' accrued interest, is due on February 1, 2016. |
| 8. | Accrued butunrecorded salaries at December 31 amount to $2,700. |
| 9. | Estimated incometaxes expense for the entire year totals $15,000. Taxesare due in the first quarter of 2016. |
| Instructions |
| a. | For each of thenumbered paragraphs, prepare the necessary adjusting entry.(If no entry is required for a transaction/event, select"No journal entry required" in the first accountfield.) |
Journal Entry Worksheet
Record the accrued but uncollected fees earned.
Record fees earned as of December 31st.
Record the December insurance expense.
Record the December rent expense.
Record the offices supplies used in December.
Record the December depreciation expense.
Record the interest accrued in December.
Record the salaries accrued in December.
Record the income taxes accrued in December.
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*Enter debits before credits
| 1. | Fees earned | |
| 2. | Travel expense | |
| 3. | Insurance expense | |
| 4. | Rent expense | |
| 5. | Office supplies expense | |
| 6. | Utilities expense | |
| 7. | Depreciation expense: equipment | |
| 8. | Interest expense | |
| 9. | Salaries expense | |
| 10. | Income taxes expense |
| . | The unadjusted trial balance reportsdividends of $3,000. As of December 31, 2015, have these dividendsbeen paid? | ||||
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