Chapter_4_HW_Solution_final

Chapter_4_HW_Solution_final - AEM 221 Financial Accounting...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
AEM 221 Financial Accounting Spring 2007 Chapter 4 Homework Solution E4-6 Recording Seven Typical Adjusting Entries Golf Universe is completing the accounting process for the year just ended, December 31, 2007. The transactions during 2007 have been journalized and posted. The following data with respect to adjusting entries are available in requirement 1: Required: 1. Identify each of these transactions as a deferred revenue, deferred expense, accrued revenue, or accrued expense. 2. Using the process illustrated in the chapter, for each situation record the adjusting entry that should be recorded for Golf Universe at December 31, 2007. 1. a. Office supplies on hand at January 1, 2007, was $250. Office supplies purchased and debited to Office Supplies during the year amounted to $550. The year-end count showed $350 of supplies on hand. Deferred expense b. Wages earned by employees during December 2007, unpaid and unrecorded at December 31, 2007, amounted to $3,400. The last payroll was December 28; the next payroll will be January 6, 2004. Accrued expense c. Three-fourths of the basement of the store is rented for $1,300 per month to another merchant, Klondike Shoes and Sandals. Klondike Shoes and Sandals sells compatible, but not competitive, merchandise. On November 1, 2007, the store collected six months' rent in the amount of $7,800 in advance from Klondike Shoes and Sandals; it was credited in full to Unearned Rent Revenue when collected. Deferred revenue d. The remaining basement space is rented to Carlen's Emporium for $390 per month, payable monthly. On December 31, 2007, the rent for November and December 2007 had not been collected or recorded. Collection is expected January 10, 2004. Accrued revenue e. The store used delivery equipment that cost $31,000 and $6,200 was the estimated depreciation for 2007. Deferred expense f. On July 1, 2007, a two-year insurance premium amounting to $3,900 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1, 2007. Deferred expense g. Golf Universe operates a repair shop to meet its own needs. The shop also does repairs for Klondike Shoes and Sandals. At the end of December 31, 2007, Klondike Shoes and Sandals had not paid for $450 in completed alterations. This amount has not yet been recorded as Repair Shop Revenue. Collection is expected during January 2004.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern