b Office supplies on hand at January 1 of the current year totaled totaled 450

B office supplies on hand at january 1 of the current

This preview shows page 47 - 51 out of 69 pages.

b. Office supplies on hand at January 1 of the current year totaled totaled $450. Office supplies purchased and debited to Office Supplies during the year amounted to $500. The year-end count showed $275 of supplies on hand. c. One-fourth of the basement space is rented to Heald’s Specialty Shop for $560 per month, payable monthly. At the end of the current year, the rent for November and December had not been collected or recorded. Collection is expected in January of the next year. d. The store used delivery equipment all year that cost $60,500; $12,100 was the estimated annual depreciation. e. On July 1 of the current year, a two-year insurance premium amounting to $2,400 was paid in cash and debited in full to Prepaid Insurance. Coverage began on July 1 of the current year. f. The remaining basement of the store is rented for $1,600 per month to another merchant, M. Carlos, Inc. Carlos sells compatible, but not competitive, merchandise. On November 1 of the current year, the store collected six months’ rent in the amount of $9,600 in advance from Carlos; it was credited in full to Unearned Rent Revenue when collected. g. Dittman’s Variety Store operates a repair shop to meet its own needs. The shop also does repairs for M. Carlos. At the end of the current year, Carlos had not paid $800 for completed repairs. This amount has not yet been recorded as Repair Shop Revenue. Collection is expected during January of next year. Required: For each of the transactions above, indicate the amount and direction of effects of the adjusting entry on the elements of the balance sheet and income statement. Using the table below, indicate + for increase and - for decrease.
Image of page 47
Image of page 48
Chapter 4 - Multiple Choice Question 3 On October 1, 2017, the $12,000 premium on a one-year insurance policy for the building was paid and recorded as Prepaid Insurance. On December 31, 2017 (end of the accounting period), what adjusting entry is needed? Chapter 4 - Multiple Choice Question 4 On June 1, 2016, Oakcrest Company signed a three-year $110,000 note payable with 9 percent interest. Interest is due on June 1 of each year beginning in 2017. What amount of interest expense should be reported on the income statement for the year ended December 31, 2016?
Image of page 49
thousands of dollars.
Image of page 50
Image of page 51

You've reached the end of your free preview.

Want to read all 69 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes