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Chapter 3: Q7BE (page 128)
(LO2,3) Dresser Company鈥檚 weekly payroll, paid on Fridays, totals \(8,000. Employees work 5-days week. Prepare Dresser鈥檚 adjusting entry on Wednesday, December 31, and the journal entry to record the \)8,000 cash payment on Friday, January 2.
The total for both debit and credit sides is $12,800.
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Question: Presented below is the trial balance of the Crestwood Golf Club, Inc. as of December 31. The books are closed annually on December 31.
CRESTWOOD GOLF CLUB, INC. TRIAL BALANCE DECEMBER 31 | ||
Debit | Credit | |
Cash | \(15,000 | |
Accounts receivables | 13,000 | |
Allowance for doubtful accounts | \)1,100 | |
Prepaid insurance | 9,000 | |
Land | 350,000 | |
Building | 120,000 | |
Accumulated depreciation 鈥� building | 38,400 | |
Equipment | 150,000 | |
Accumulated depreciation 鈥� equipment | 70,000 | |
Common stock | 400,000 | |
Retained earnings | 82,000 | |
Dues revenue | 200,000 | |
Green fees revenue | 5,900 | |
Rent revenue | 17,600 | |
Utilities expenses | 54,000 | |
Salaries and wages expenses | 80,000 | |
Maintenance and repair expenses | 24,000 | |
\(815,000 | \)815,000 | |
Instructions
(a) Enter the balances in ledger accounts. Allow five lines for each account.
(b) From the trial balance and the information given below, prepare annual adjusting entries and post to the ledger accounts. (Omit explanations.)
(1) The buildings have an estimated life of 30 years with no salvage value (straight-line method).
(2) The equipment is depreciated at 10% per year.
(3) Insurance expired during the year \(3,500.
(4) The rent revenue represents the amount received for 11 months for dining facilities. The December rent has not yet been received.
(5) It is estimated that 12% of the accounts receivable will be uncollectible.
(6) Salaries and wages earned but not paid by December 31, \)3,600.
(7) Dues received in advance from members $8,900 were recorded as Dues Revenue.
(c) Prepare an adjusted trial balance.
(d) Prepare closing entries and post.
A review of the ledger of Baylor Company at December 31, 2017, produces the following data pertaining to the preparation of annual adjusting entries.
Unearned Rent Revenue \)429,000. The company began subleasing office space in its new building on November 1. Each tenant is required to make a \(5,000 security deposit that is not refundable until occupancy is terminated. At December 31, the company had the following rental contracts that are paid in full for the entire term of the lease.
Date | Term (in months) | Monthly Rent | Number of Leases |
Nov. 1 | 6 | \)6,000 | 5 |
Dec. 1 | 6 | \(8,500 | 4 |
Prepaid Advertising \)13,200. This balance consists of payments on two advertising contracts. The contracts provide for monthly advertising in two trade magazines. The terms of the contracts are as shown below.
Contract | Due date | Amount | Number of magazine issue |
A650 | May 1 | \(6,000 | 12 |
B974 | Oct. 1 | 7,200 | 24 |
The first advertisement runs in the month in which the contract is signed
Notes Payable \)60,000. This balance consists of a note for one year at an annual interest rate of 12%, dated June 1.
Instructions
Prepare the adjusting entries at December 31, 2017. (Show all computations).
E3-13 (Lo5,6) (Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue \(800,000, Delivery Expenses \)12,000, Sales Returns and Allowances \(24,000 and Sales Discounts \)15,000.
Instructions:
(b) Prepare separate closing entries for (1) Sales and (2) the contra accounts to sales.
BE3-5 (L02,3) Assume that on February 1, Procter & Gamble (P&G) paid $720,000 in advance for 2 years鈥� insurance coverage. Prepare P&G鈥檚 February 1 journal entry and the annual adjusting entry on June 30.
Selected accounts of Urdu Company are shown below.
| Supplies | |||
Beg. Bal | 800 | 10 鈦� 31 | 470 |
| Salaries and Wages Expense | |||
10 鈦� 15 | 800 | ||
10 鈦� 31 | 600 | ||
| Unearned Service Revenue | |||
10 鈦� 31 | 400 | 10 鈦� 20 | 650 |
| Service Revenue | |||
10 鈦� 17 | 2,400 | ||
10 鈦� 31 | 1,650 | ||
10 鈦� 31 | 400 | ||
| Accounts Receivable | |||
10 鈦� 17 | 2,400 | ||
10 鈦� 31 | 1,650 | ||
| Salaries and Wages Payable | |||
10 鈦� 31 | 600 | ||
| Supplies Expense | |||
10 鈦� 31 | 470 | ||
Instructions
From an analysis of the T-accounts, reconstruct
(a) the October transaction entries, and
(b) the adjusting journal entries that were made on October 31, 2017. Prepare explanations for each journal entry
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