Unit 2 Study Exercise.docx - QUESTION 2.1(2 marks each x 6...

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QUESTION 2.1 (2 marks each x 6 = 12 marks) In accounting, before transactions are entered into a corporation's accounting system, the underlying event must be analyzed. From this analysis, an accountant will determine how (and if) the transaction should be recorded. The situations below relate to Ken & Gary’s Yogurt Corporation; indicate whether the items below are recordable OR non-recordable events. 1. A new mortgage contract for its new factory building is signed.
2. The first mortgage payment is made.
3. Wages for the current month are paid.
4. A new secretary is hired.
5. Property taxes are paid.
6. HST collections for the current month are forwarded to the CRA.
QUESTION 2.2 (2 marks each line x 6 = 12 marks) Provide the adjustments that would be made on July 31, 2018, the end of the fiscal year, for each of the following scenarios: 1. The supplies inventory on August 1, 2017 was $8,350. Supplies costing $16,650 were purchased during the fiscal year and debited to Supplies Inventory. A count on July 31, 2018 indicated supplies on hand of $6,810.

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