— Paul’s employee works half a pay period, so Paul accrues $500 of wages. Salaries Expense, $4,150 . This is posted to the Cash T-account on the credit side beneath the January 18 transaction. deferred revenue. This amount is an increase in an asset and an increase in revenue. 3) Interest totaling $500 is accrued on the notes payable for the quarter. To reduce the Insurance Expense to $200 you need to credit Insurance Expense for $2,200. $2,400 divided by the 12 months of coverage = $200 per month. PORTER COMPANY Worksheet For the Year Ended December 31, 2008 Adjusted Account Trial Balance No. 6 The draft profit for the year ended 31 December 2016 was $21 600. These items are recorded as short-term liabilities as well: FICA: The employer is obligated to match each employee’s contribution dollar for dollar. 4. On January 8 of the next year, total salaries and wages of $3,400 were paid. On your income statement, on the debit side of your ledger, you'll have a similar account named "Wages Expense" or something similar. — Paul’s December electric bill was $200 and is due January 15th. For this transaction, we will record/increase the expense account by debiting it and decrease cash by crediting it. Discounts on notes payable at the end of 2008 are $1,100. Finally, in most cases, your books will also include a journal that records each transaction. Principal x Rate xTime =Interest Total through maturity $ 160,000vl 8%vl 901360 vi $ 3,200vl Office supplies on hand at December 31, 2015 amounted to $300. These will be paid on January 4, 2010. 3) Dec 31: Salaries Expense 360 Salaries Payable 360: To record salaries earned but not paid. In actual practice, different payroll accounting methods are applied. 50) Failure to record an accrued revenue: A) overstates liabilities B) overstates revenue C) overstates assets D) understates assets 51) On September 1, 2010, Two Sisters Company pays $36,000 cash for six months' rent. The week’s worth of unpaid salaries and wages is actually a liability that you will have to pay in the future even though you haven’t yet spent the cash. On this transaction, Cash has a credit of $3,600. Dec. 31 The note payable of $12,000 has been outstanding since September 1, 2000. The employee makes $20 per hour. As of December 31, employees had earned $1,500 of unpaid and unrecorded salaries. — On December 31, a customer prepays Paul for guitar lessons for the next 6 months. Question 1. 5) Dec 31: Insurance Expense 200 Prepaid Insurance 101 Cash 18,800 . Transaction #15: On December 31, the company paid salaries to its employees, $3,500. (b) Enter the December 1 balances in the ledger T accounts and post the December transactions. 3. Recording journal entries. Assuming the correct reversing entry was made on January 1, the entry on January 8 will result in a credit to Cash $3,400 and debit(s) to 1 100 31/7 800 3/17 900 1/7 Bal. Prepare the income statement for the year ended December 31, 2017. The $2,400 transaction was recorded in the accounting records on December 1, but the amount represents six months of coverage and expense. Transaction 9: On January 20, 2019, paid $3,600 cash in salaries expense to employees. Inspection of the company's records reveals the following as of December 31, 2008: (a) Uncollectable accounts are estimated at 4% of the accounts receivable balance. The next payday is January 4, at which time $1,875 of salaries will be paid. Store supplies of $300 have been used. Supplies Expense Salaries Payable (LO 5, 6, 7) 31/7 800 31/7 1 200 Supplies Unearned Revenue 1/7 Bal. Affleck Company accumulates the following adjustment data at December 31. To illustrate let's assume that on December 1, 2019 the company paid its insurance agent $2,400 for insurance protection during the period of December 1, 2019 through May 31, 2020. Following are Nintendo’s revenue and expense accounts for a recent March 31 fiscal year-end (yen in millions). Prepaid insurance totaling $350 has expired. Assume that an 18-month loan was taken out on July 1, 20X1, and was due on December 31, 20X2. accrued revenue. b. Presently there is a $2,400 debit balance in Insurance Expense. Dana Co.'s officers' compensation expense account had a balance of $224,000 at December 31, 20X4 before any appropriate year-end adjustment relating to the following: No salary accrual was made for December 30-31, 20X4. When the AP department receives the invoice, it records a $500 credit in the accounts payable field and a $500 … A $1,800. This is where you'll add the accrued salaries, once you've calculated a total. You'll add the corresponding amount here. As of December 31 one month has gone by, so one month of insurance has expired and belongs in Insurance Expense. On December 31, Frank Voris Company correctly made an adjusting entry to recognize $2,000 of accrued salaries and wages payable. 4. (Note: This is a simplified entry to present the payment of salaries. 5 No entry has been made in the accounting records for a motor vehicle, $16 000, introduced into the business by Mandeep on 30 December 2016. 1. (b) The accrued interest on investments totals $2,900. It means that the cost of $3,500 ($4,000 – $500) is to be allocated as expense over ten years. To record December accrued interest revenue. Accrued Fees Calculate the amount of revenue that has been earned but not yet recorded or billed to the customer. So if your gross wage is $500 and you have $100 in pretax deductions, you pay tax on $400. a. Prepare the statement of retained earnings for the year ended December 31, 2017. The first entry records the salaries liability during the month of August. This is placed on the debit side of the Salaries Expense T-account. Salaries Expense is an equity account used to recognize the accumulated (accrued) expense to the business during August (increase on the debit side). Indicate which items will be erroneously stated, because of error, on a) the iincome statement for december 2008 and b) the balance sheet as of december 31, 2008. (c) The company borrows cash by discounting its own notes at the bank. Income tax due and unpaid at December 31 is $200. 4 Accrued income. C $11,650. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of December 31. Accrued salaries of $600 owed to employees for December 29, 30, and 31 are not taken into consideration in preparing the financial statements for the year ended December 31. Salaries of $900 are unpaid. Unearned Salaries, $4,150 . Accrued salaries of $3,900 owed to employees for december 30 and 31 are not considered in preparing the financial statements for the year ended december 31,2008. 2. 2) One-third of the unearned rent revenue was earned during the quarter. As of December 31, 2005, employees had earned $900 of unpaid and unrecorded salaries. 4 Rent receivable owing by the tenant at 31 December 2016 amounted to $460. Depreciation $200 per month. 6. 4) Dec 31: Unearned Revenue 1,500 Service Revenue 1,500: To record deferred revenue now earned. 5. Question 3 . Account Titles Dr. Cr. The estimated income taxes for 2015 are $5,000. Salaries for the last three days of December amounting to $300 have not yet been recorded. 3. Unearned revenue of $260 has been earned. B $11,450 . Salaries Expense represents the employee’s gross income (pay) before any deductions. D $13,450. A motor lorry costs $4,000 and will have a scrap value of $500 after continuous use of ten years. Accrued income arises where income has been earned in the accounting period but has not yet been received. 20X4 officers' bonuses of $62,500 were paid on January 31, 20X5. The 401(k) contributions total $150. This adjusting entry increases both the Payroll Expenses reported on the income statement and the Accrued Payroll Expenses that appear as a liability on the balance sheet. Q5. Under the terms of the note, the note plus interest (10%) is to be paid on September 1, 2001. e. The Prepaid Insurance account had a $5,000 balance on December 31, 201 2. Salaries Expense has a debit of $3,600. Dec. 31 $1,080 of salaries earned by employees during December will be paid in January. 1. 4. An adjusted trial balance prepared on December 31, 2009, includes which of the following? Supplies on hand $1,500. For example, if $1,000 of revenue has been earned, but $500 of that revenue has not yet been recorded, $500 is the amount of revenue that needs to be entered. — Paul’s leasehold improvement depreciation is $2,000 for the year. (e) Accrued Fees.Fees accrued at the end of December but not recorded total $500. What is the electricity charge to the income statement? Accrued salaries payable: ... Equipment has an estimated useful life of ten years and an estimated residual value of $500. The total vacation accrual would be $900 (45 hours x $20 per hour). Complete the six-column table by entering adjustments that reflect the following information: a. On December 31, 2009, salaries owed to employees total $4,150. Compute the accrued interest payable on December 31, 2013. Unexpired insurance at December 31 $1,500 b. Accounting. Supplies on hand at December 31 $400 c. Depreciation of building for the year $1,750 d. Depreciation of equipment for the year $5,800 e. Revenue unearned at December 31 $2,000 f. Accrued salaries and wages at December 31 $2,300 g. Fees earned but unbilled on December 31 $4,850 F Company 2. The accrued total is 45 hours (50 hours + 5 additional hours – 10 hours used). Services provided but not recorded total $750. All but $500 in the Unearned Commissions account has been earned in 2015. Salaries for the two-day period totaled $3,500. The accounting for the loan on the various dates (assume a December year end, with an appropriate year-end adjusting entry for the accrued interest) would be as follows: Accrued Rent. At December 31, the following information is made available for the preparation of adjusting entries. Instructions (a) Journalize the December transactions using a perpetual inventory system. An analysis of insurance policies shows that $2,000 of unexpired insurance benefits remain at December 31, 201 3. f. The company has earned (but not recorded) $1,000 of interest from investments in CDs for the year ended December 31 , 201 3. Accrued salaries payable $800. After you calculate the vacation time accrued for each employee, you will need to record them in your business’s books. Enter the adjustment by writing (1) $500 in the Adjustments Debit column on the same line as Accounts Receivable and (2) $500 in the Adjustments Credit column on the same line as Fees Earned. Accrued rent is the opposite of prepaid rent discussed earlier. By contrast, imagine a business gets a $500 invoice for office supplies. The employer business also has payroll tax expense based on the employees’ gross wages. The Retained Earnings account balance is $130,280 at December 31, 2016. 1) The equipment depreciates $400 per month. At 31 December 20X5, Willy calculated that he owed $1,800 in respect of electricity for the last part of the year. 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