Cactus Companyâs annual accounting year ends on June 30. Assumeit is June 30, and all of the entries except the followingadjusting journal entries have been made:
a. The company earned service revenue of $1,900 on a special jobthat was completed June 29. Collection will be made during July; noentry has been recorded.
b. On March 31, Cactus paid a six-month premium for propertyinsurance in the amount of $3,180 for coverage starting on thatdate. Cash was credited and Prepaid Insurance was debited for thisamount.
c. At June 30, wages of $890 were earned by employees but not yetpaid. The employees will be paid on the next payroll date, which isJuly 15.
d. On June 1, Cactus collected two monthsâ revenue of $440. At thatdate, Cactus debited Cash and credited Unearned Revenue for $440.One-half of it has now been earned but not yet recorded.
e. Depreciation of $1,490 must berecognized on a service truck purchased on July 1 of the previousyear. f. Cash of $4,140 was collected on May 1 for services to berendered evenly over the next year beginning on May 1. UnearnedRevenue was credited when the cash was received. Some of it has nowbeen earned but not yet recorded.
g. The company owes interest of $590 on a bank loan taken out onFebruary 1. The interest will be paid when the loan is repaid nextyear on January 31.
h. The income after all adjustments except income taxes was$31,000. The companyâs federal income tax rate is 25%. Compute andrecord income tax expense.
Required: 1. Determine the accounting equation effects of each requiredadjustment.
2. Give the adjusting journal entry required for each transactionat June 30. (If no entry is required for atransaction/event, select "No Journal Entry Required" in the firstaccount field.)
Cactus Companyâs annual accounting year ends on June 30. Assumeit is June 30, and all of the entries except the followingadjusting journal entries have been made: |
| a. | The company earned service revenue of $1,900 on a special jobthat was completed June 29. Collection will be made during July; noentry has been recorded. | ||||||
| b. | On March 31, Cactus paid a six-month premium for propertyinsurance in the amount of $3,180 for coverage starting on thatdate. Cash was credited and Prepaid Insurance was debited for thisamount. | ||||||
| c. | At June 30, wages of $890 were earned by employees but not yetpaid. The employees will be paid on the next payroll date, which isJuly 15. | ||||||
| d. | On June 1, Cactus collected two monthsâ revenue of $440. At thatdate, Cactus debited Cash and credited Unearned Revenue for $440.One-half of it has now been earned but not yet recorded. | ||||||
| e. | Depreciation of $1,490 must berecognized on a service truck purchased on July 1 of the previousyear. | ||||||
| f. | Cash of $4,140 was collected on May 1 for services to berendered evenly over the next year beginning on May 1. UnearnedRevenue was credited when the cash was received. Some of it has nowbeen earned but not yet recorded. | ||||||
| g. | The company owes interest of $590 on a bank loan taken out onFebruary 1. The interest will be paid when the loan is repaid nextyear on January 31. | ||||||
| h. | The income after all adjustments except income taxes was$31,000. The companyâs federal income tax rate is 25%. Compute andrecord income tax expense.
| ||||||
Related questions
I NEED HELP MAIKING A GENERAL JOURNAL FORTHIS
Jordan Companyâs annual accounting year ends on December 31. Itis now December 31, 2015, and all of the 2015 entries have beenmade except for the following: |
| a. | The company owes interest of $640 on a bank loan. The interestwill be paid when the loan is repaid on September 30, 2016. Nointerest has been recorded. |
| b. | On September 1, 2015, Jordan collected six monthsâ rent of$4,440 on storage space. At that date, Jordan debited Cash andcredited Unearned Revenue for $4,440. |
| c. | The company earned service revenue of $2,700 on a special jobthat was completed December 29, 2015. Collection will be madeduring January 2016. No entry has been recorded. |
| d. | On November 1, 2015, Jordan paid a one-year premium for propertyinsurance of $3,840, for coverage starting on that date. Cash wascredited and Prepaid Insurance was debited for this amount. |
| e. | At December 31, 2015, wages earned by employees but not yet paidtotaled $1,200. The employees will be paid on the next payrolldate, January 15, 2016. |
| f. | Depreciation of $1,100 must be recognized on a service truckpurchased this year. |
| g. | The income after all adjustments other than income taxes was$29,400. The company's income tax rate is 20%. Compute and recordincome tax expense. |
Question 16
Corresponds to CLO 3(d) Hemmingway Corporation paid salaries of$5,000 and advertising expense of $2,000. Which of the followingjournal entries correctly records these expenses?
Debit: Cash $7,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 | ||
Debit: Salaries/Wages Expense$5,000 |
3 points
Question 17
Corresponds to CLO 4(a) Which of the following statements iscorrect regarding accrued revenues and unearned revenues, beforeadjusting entries have been made?
Accrued revenues have not been earned and unearned revenues havebeen earned. | ||
Accrued revenues have been paid and unearned revenues havenot. | ||
Accrued revenues have not been recorded and unearned revenueshave been recorded. | ||
Accrued revenues have been recorded and unearned revenues havebeen recorded. |
3 points
Question 18
Corresponds to CLO 4(b) Hudson Law Corporation received $5,500cash for legal services to be rendered in the future. The fullamount was credited to the liability account Unearned ServiceRevenue. At the end of the period, Hudson determines that $3,000 ofthe legal services have been rendered. The appropriate adjustingjournal entry to be made at the end of the period is:
debit Unearned Service Revenue, $3,000; credit Cash, $3,000. | ||
debit Unearned Service Revenue, $3,000; credit Service Revenue,$3,000. | ||
debit Unearned Service Revenue, $2,500; credit Service Revenue,$2,500. | ||
debit Service Revenue, $2,500; credit Unearned Service Revenue,$2,500. |
3 points
Question 19
Corresponds to CLO 4(c) Ace Corporation purchased officesupplies costing $13,000 and debited Office Supplies for the fullamount. At the end of the accounting period, a physical count ofoffice supplies revealed $2,700 still on hand. The appropriateadjusting journal entry to be made at the end of the period is:
debit Office Supplies Expense, $10,300; credit Office Supplies,$10,300. | ||
debit Office Supplies, $10,300; credit Office Supplies Expense,$10,300. | ||
debit Office Supplies Expense, $2,700; credit Office Supplies,$2,700. | ||
debit Office Supplies, $2,700; credit Office Supplies Expense,$2,700. |
3 points
Question 20
Corresponds to CLO 4(d) On September 1, Northgate paid $18,000to Evans Management Company for 12 months of rent beginning onSeptember 1. The appropriate journal entry was made to record thistransaction. If financial statements are prepared for the 9 monthsended September 30, the adjusting entry to be made by Northgateis:
debit Rent Expense, $13,500; credit Prepaid Rent, $13,500. | ||
debit Prepaid Rent, $1,500; credit Rent Revenue, $1,500. | ||
debit Prepaid Rent, $1,500; credit Rent Expense, $1,500. | ||
debit Rent Expense, $1,500; credit Prepaid Rent, $1,500. |
3 points
Question 21
Corresponds to CLO 5(a) Lennox Corporation purchased a newdelivery truck for 35,000. The sales taxes are $2,700. The logo ispainted on the side of the truck for $800. The truck's annuallicense is $200. Annual insurance on the truck is $1,300. Whatshould Lennox record as the cost of the new truck?
$40,000 | ||
$38,500 | ||
$37,700 | ||
$35,000 |
3 points
Question 22
Corresponds to CLO 5(b) On April 1, 2013, Ballard Corporationpurchased equipment for $65,000. It is estimated that the equipmentwill have a $5,000 salvage value at the end of its 5 year usefullife. If Ballard uses the straight-line method of depreciation,what is the accumulated depreciation at December 31, 2013?
$13,000 | ||
$12,000 | ||
$9,750 | ||
$9,000 |
3 points
Question 23
Corresponds to CLO 5(c) Tyree Company purchased equipment with acost of $90,000 and an estimated salvage value of $18,000. Theequipment is expected to produce 150,000 units over its estimateduseful life of 10 years. If Tyree uses the units-of-activitymethod, what is the depreciation cost per unit to be used incalculating depreciation?
$1.67 | ||
$0.48 | ||
$2.08 | ||
$0.60 |
3 points
Question 24
Corresponds to CLO 5(d) Kerns Company purchased equipment with acost of $200,000 and an estimated salvage value of $10,000. Theequipment has an estimated useful life of 10 years. If Kerns usesthe double-declining balance method, what is the annualdepreciation rate to be used in calculating depreciation?
5% | ||
10% | ||
20% | ||
40% |
3 points
Question 25
Corresponds to CLO 6(a) Marshall Machinery made a sale for$150,000 on March 31. The customer is sent a statement on April 6and payment is received on April 15. Marshall prepares March'smonthly internal financial statements on April 20. Marshall followsGAAP and applies the revenue recognition principle. When is the$150,000 considered to be earned?
March 31 | ||
April 6 | ||
April 15 | ||
April 20 |
