Learning objective 04 02 des cribe and prepare the

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Unformatted text preview: 2 Des cribe and prepare the four bas ic types of adjus ting entries . Learning Objective: 04-05 Prepare adjus ting entries to accrue unpaid expens es . Sec urity Servic e Company adjus ts its ac c ounts at the end of the month. On November 30, adjus ting entries are prepared to rec ord: a . Deprec iation ex pens e for November. b. Interes t ex pens e that has ac c rued during November. c. Revenue earned during November that has not y et been billed to c us tomers . d. Salaries , pay able to c ompany employ ees , that have ac c rued s inc e the las t pay day in November. e . The portion of the c ompany 's prepaid ins uranc e that has ex pired during November. f. Earning a portion of the amount c ollec ted in advanc e from a c us tomer, Harbor Res taurant. Indic ate the effec t of eac h of thes e adjus ting entries on the major elements of the c ompany 's inc ome s tatement and balanc e s heet—that is , on revenue, ex pens es , net inc ome, as s ets , liabilities , and owners ' equity . Organiz e y our ans wer in tabular form, us ing the c olumn headings s hown and the s y mbols I for inc reas e, D for dec reas e, and NE for no effec t. The ans wer for adjus ting entry a is provided as an ex ample. Inc ome Statement Adjus ting Entry a b c d e f Revenue NE NE I NE NE I – Ex pens es I I NE I I NE http://ezto.mhecloud.mcg r aw- hill.com/hm_accounting .tpx?todo= pr intview Balanc e Sheet = Net Inc ome D D I D D I As s ets D NE I NE D NE = Liabilities NE I NE I NE D + Owners ' Equity D D I D D I 2/16 1/23/2014 3. Assig nment Pr int View aw ar d: 1 out of 1.00 point The Golden Goals , a profes s ional s oc c er team, prepares financ ial s tatements on a monthly bas is . The s oc c er s eas on begins in May , but in April the team engaged in the following trans ac tions : 1. Paid $1,200,000 to the munic ipal s tadium as advanc e rent for us e of the fac ilities for the five-month period from May 1 through September 30. This pay ment was initially rec orded as Prepaid Rent. 2. Collec ted $4,500,000 c as h from the s ale of s eas on tic k ets for the team's home games . The entire amount was initially rec orded as Unearned Tic k et Revenue. During the month of May , the Golden Goals play ed s everal home games at whic h $148,800 of the s eas on tic k ets s old in April were us ed by fans . Prepare the two adjus ting entries required on May 31. (Om it the "$" sign in your re sponse .) General Journal 1. 2. Debit 240,000 Re nt e x pe nse Pre pa id re nt Credit 240,000 Une a rne d ticke t re ve nue Ticke t re ve nue e a rne d 148,800 148,800 W orksheet Learning Objective: 04-03 Prepare adjus ting entries to convert as s ets to expens es . Learning Objective: 04-06 Prepare adjus ting entries to accrue uncollected revenue. Learning Objective: 04-01 Explain the purpos e of adjus ting entries . Learning Objective: 04-04 Prepare adjus ting entries to convert liabilities to revenue. Learning Objective: 04-07 Explain how the principles of realization and m atching relate to adjus ting entries . Learning Objective: 04-02 Des cribe and...
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This note was uploaded on 01/23/2014 for the course ACC 111 taught by Professor Angela during the Fall '08 term at Delaware County CC.

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