D disagree whether or not the bill was received the

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Managerial Accounting
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Chapter 15 / Exercise EX15-5
Managerial Accounting
Warren/Tayler
Expert Verified
d) Disagree. Whether or not the bill was received, the expense was incurred and should be recognized. The matching principle supports this position.
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We have textbook solutions for you!
The document you are viewing contains questions related to this textbook.
Managerial Accounting
The document you are viewing contains questions related to this textbook.
Chapter 15 / Exercise EX15-5
Managerial Accounting
Warren/Tayler
Expert Verified
CHAPTER 3 Measuring Business Income: The Adjusting Process L.O. 2 Moderate Page: 94 104. On December 31, 20X2, Jones Company omitted the following adjusting entries: a) Accrued wages of $5,000 owed to employees b) Accrued revenue for services rendered of $5,500 Assuming the financial statements are prepared before the errors are discovered, state the effects of each error on the financial statement elements by completing the chart. Error a Error b Overstate d Understat ed Overstate d Understat ed Assets at Dec. 31, 20X2, would be Liabilities at Dec. 31, 20X2, would be Net income for 20X2 would be Owner's equity at Dec. 31, 20X2, would be
L.O. 3 Difficult Page: 96 105. Given the following adjustment data, state whether the resulting adjustment will be a deferral or an accrual. a) Recorded service revenue received in advance from clients. b) Recorded salaries earned by employees at end of month, payment to be made early next month. c) Prepaid insurance was used during the month. d) Estimated current month's utilities bill and recorded the amount. The bill is to be received and paid next month. e) Performed services on account, payment to be received next month. f) Supplies were used during the month. Solution:
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d) accrual e) accrual f) deferral L.O. 3 Moderate Page: 96 106. Compute the amounts indicated for each of the following independent situations. Situation A B C D Beginning supplies balance ? $1,75 0 $2,50 0 $2,00 0 Payments for supplies during the year $3,800 ? $3,30 0 $1,80 0 Ending supplies balance $2,300 $2,17 0 ? $2,90 0 Supplies expense on the income statement $1,600 $1,70 0 $3,55 0 ?
L.O. 3 Moderate Page: 96 107. Prepare adjusting entries for the following items on December 31, the end of the fiscal year for Cleaner Carpets. a) Prepaid rent expired during the year, $8,500 b) Supplies used during the year, $2,250 c) Salaries owed to employees at year-end, $2,500 d) Unearned service revenue earned, $5,500 e) Services performed but unbilled, $3,200 f) Depreciation on equipment, $2,200 76
CHAPTER 3 Measuring Business Income: The Adjusting Process Solution: GENERAL JOURNAL Date Accounts Debit Credit a) Rent Expense 8,50 0 Prepaid Rent 8,500 b) Supplies Expense 2,25 0 Supplies 2,250 c) Salary Expense 2,50 0 Salary Payable 2,500 d) Unearned Service Revenue 5,50 0 Service Revenue 5,500 e) Accounts Receivable 3,20 0 Service Revenue 3,200 f) Depreciation Expense 2,20 0 Accumulated Depreciation 2,200 L.O. 3 Moderate Page: 96 108. Based on the partial trial balance and the partial adjusted trial balance shown below, prepare the six missing adjusting entries. The adjusting entries should be dated December 31.

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