Adjusting Journal Entries
At what date are adjusting entries usually recorded on?
December 31
Eagle Corporation operates Magnetic Resonance Imaging (MRI) clinics throughout the Northeast. At the end of the current period, the company reports the following amounts: Assets = $41,000; Liabilities = $22,500; Dividends = $2,100; Revenues = $12,200; Expenses = $8,100. What is net income and stockholders' equity ?
net income: $4,100
stockholders' equity: $18,500
How would net income be affected from the transaction: Borrowing cash from the bank, $2,600.
No change
what are the formulas for all three depreciation methods?
activity based: (cost-residual value)/(useful life in units of production) *number of units used for the year
straight line: (cost-residual value)/(useful life in years)
double declining: Net book value * 2/useful life in years
What does cost of goods sold represent
the expense of the inventory sold
On July 1, 2024, Moreno received $5,200 from a customer for advertising services to be given evenly over the next 10 months. Record the adjusting JE at Dec. 31
Debit: deferred revenue $3,120
Credit: service revenue $3,120
Use the following amounts to calculate net income: Revenues, $10,100; Liabilities, $3,700; Expenses, $3,500; Assets, $17,000; Dividends, $1,600.
$6,600
On February 3, a company provides services on account for $28,500, terms 3/10, n/30. On February 9, the company receives payment from the customer for those services on February 3.
Record the service on account on February 3 and the collection of cash on February 9.
feb 3:
debit accounts receivable $28,500
credit service revenue $28,500
feb 9:
debit cash $27,645
debit sales discount $855
credit accounts receivable $28,500
On January 1, Buy More Groceries purchased store equipment for $25,000. Buy More estimates that at the end of its 10-year service life, the equipment will be worth $4,000. During the 10-year period, the company expects to use the equipment for a total of 10,000 hours. Buy More used the equipment for 1,600 hours the first year. Calculate depreciation for the first year using activity-based depreciation
$3,360
At the beginning of the year, Fireside Company reports they have inventory of $15,500. During the year, the company purchases additional inventory for $32,800. At the end of the year, the cost of inventory remaining is $16,600. Calculate cost of goods sold for the year.
$31,700
$480
The following amounts are reported in the ledger of Harmony Company:
Assets: $82,000
Liabilities: $42,000
Retained Earnings: $9,500
What is the balance in the Common Stock account?
$30,500
Lodge Outfitters issues 1,800 shares of its $0.01 par value common stock to provide funds for further expansion. Assuming the issue price is $12 per share, record the issuance of common stock.
debit cash $21,600
credit common stock $18
credit additional paid in capital $21,582
New Morning Bakery is in the process of closing its operations. It sold its two-year-old bakery ovens to Great Harvest Bakery for $510,000. The ovens originally cost $701,000, had an estimated service life of 10 years, had an estimated residual value of $41,000, and were depreciated using straight-line depreciation. What was the amount of accumulated depreciation after the second year and what was the book value at the end of the second year?
Accumulated depreciation balance: $132,000
Book value: $569,000
The following information pertains to inventory for a company:
March 1: Beginning inventory = 33 units @ $5.90
March 3: Purchased 21 units @ $4.50
March 9: Sold 23 units @ $8.10
What is the ending inventory balance, assuming the company uses FIFO?
$153.50
At the beginning of December, Coastal Corporation had $2,900 in supplies on hand. During the month, supplies purchased amounted to $3,200, but by the end of the month the supplies balance was only $1,900. What is the appropriate month-end adjusting entry?
Debit Supplies Expense $4,200
Credit Supplies $4,200
Using the information below from the accounting records of Thomas Corporation, owners’ claims to the company's resources amount to:
Assets: $1,200,000
Liabilities: $800,000
Net income: $100,000
Retained earnings: $250,000
$400,000
California Surf Clothing Company issues 1,000 shares of $1 par value common stock at $34 per share. Later in the year, the company decides to purchase 100 shares at a cost of $37 per share.
Record the transaction if California Surf resells the 100 shares of treasury stock at $39 per share.
Debit cash: $3,900
Credit treasury stock: $3,700
Credit additional paid in capital: $200
Equipment originally costing $100,000 has accumulated depreciation of $65,000. If it is sold for $40,000, should the company report a gain or a loss and for what amount ?
gain of $5,000
On April 1st, Capetown had 540 units of beginning inventory that cost $2.42 per unit. On April 20th, they purchased 370 units at $2.61 per unit. Capetown sold 570 units of inventory; what is ending inventory assuming weighted-average cost
$849
Suppose Farina, a specialty clothing store, rents space at a local mall for one year, paying $13,200 in advance on October 1. Calculate the year-end adjusted balances of prepaid rent and rent expense (assuming the balance of Prepaid Rent at the beginning of the year is $0), and write an adjusting entry for the month of December.
Prepaid rent: $9,900
Rent expense: $3,300
Debit: rent expense
Credit: prepaid rent
Alpha Company has an ending Retained Earnings balance of $51,900. If, during the year, the company paid dividends of $4,000 and had net income of $22,600, then what was the beginning Retained Earnings balance?
$33,300
The board of directors of Capstone Incorporated declared a $0.25 per share cash dividend on its common stock. On the date of declaration, there were 100,000 shares authorized, 57,000 shares issued, and 12,000 shares held as treasury stock.
What is the entry when the dividends are declared?
debit dividends $11,250
credit dividends payable $11,250
Abbott Landscaping purchased a tractor at a cost of $42,000 and sold it three years later for $21,600. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $3,000 residual value. Tractors are included in the Equipment account. Record the sale of equipment.
Debit cash: $21,600
Debit accumulated depreciation: $23,400
Credit: equipment: $42,000
Credit gain: $3,000
March 1: beginning inventory=27 units @ $5.60
March 3: purchased 16 units @$4.40
March 9: sold 26 units @$8.60
what is COGS assuming LIFO
$126