Review for AC202

That benefit more than one nitially revenues that

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Unformatted text preview: ember 1, 2007, Scott Company paid $12,000 to cover insurance for December 2007 through May 2008. Scott recorded the expenditure as Prepaid Insurance on December 1. What adjustment is required? Dec. 31 Insurance Expense Prepaid Insurance 2,000 2,000 To record first month's expired insurance Prepaid Insurance Dec. 1 12,000 Dec. 31 Bal. 10,000 637 2,000 Insurance Expense Dec. 31 2,000 128 160 Supplies During 2007, Scott Company purchased $15,500 of supplies. Scott recorded the expenditures as Supplies. On December 31, a count of the supplies indicated $2,655 on hand. What adjustment is required? Dec. 31 Supplies Expense Supplies 12,845 12,845 To record supplies used during 2007 Supplies 126 Bought 15,500 Dec. 31 12,845 Bal. 2,655 Supplies Expense Dec. 31 12,845 652 161 Adjusting for Depreciation On January 1, 2007, Barton, Inc. purchased equipment for $62,000 cash. The equipment has an estimated useful life of 5 years and Barton expects to sell the equipment at the end of its life for $2,000 cash. Let’s record depreciation expense for the year ended December 31, 2007. Dec. 31 Depreciation Expense Accumulated Depreciation - Equipment Dr. 12,000 Cr. 12,000 To record equipment depreciation Accumulated depreciation is Accumulated depreciation is a contra asset account. a contra asset account. 162 Adjusting for Depreciation Dec. 31 Depreciation Expense Accumulated Depreciation - Equipment Dr. 12,000 Cr. 12,000 To record equipment depreciation Equipment Depreciation Expense 1/1 62,000 12/31 12,000 Accumulated Depreciation 12/31 12,000 163 Adjusting Unearned (Deferred) Revenues On October 1, 2007, Ox University sold 1,000 season tickets to its 20 home basketball games for $100 each. Ox Dr. University makes the following entry: Oct. 1 Cash 100,000 Unearned Revenue Cr. 100,000 Basketball revenue received in advance Unearned Revenue Oct. 1 100,000 Oct. 1 Cash 100,000 164 Adjusting Unearned (Deferred) Revenues On December 31, Ox University has played 10 of its regular home games, winning 2 and losing 8. Dec. 31 Unearned Revenue Basketball Revenue Dr. 50,000 Cr. 50,000 To recognize 10-game basketball revenue Unearned Revenue Dec. 31 50,000 Oct. 1 100,000 Bal. 50,000 Basketball Revenue Dec. 31 50,000 165 Adjusting for Accrued Expenses Barton, Inc. pays its employees every Friday. YearBarton, Inc. pays its employees every Friday. Yearend, 12/31/07, falls on a Wednesday. As of 12/31/07, the end, 12/31/07, falls on a Wednesday. As of 12/31/07, the employees have earned salaries of $47,250 for Monday employees have earned salaries of $47,250 for Monday tthrough Wednesday of the week ended 1/02/08. hrough Wednesday of the week ended 1/02/08. Dec. 31 Salaries Expense Salaries Payable Dr. 47,250 Cr. 47,250 To accrue 3-days' salary Salaries Expense Other salaries 657,500 Dec. 31 47,250 Bal. 704,750 Salaries Payable Dec. 31 47,250 166 Adjusting for Accrued Revenues Smith & Jones, CPAs, had $31,200 of work Smith & Jones, CPAs, had $31,200 of work completed but not yet bil...
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This note was uploaded on 09/29/2013 for the course AC 202 taught by Professor Nancyeverett during the Fall '09 term at Park.

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