Requirement 1:
GENERAL JOURNAL | IMPACT ON FINANCIAL STATEMENTS | |||||||||
Balance Sheet | Income Statement | |||||||||
Date | Account title and explanation | Debit | Credit | Assets | Liabilities | Equity | Revenue | Expenses | Net income | |
a | Dec.31,2019 | Depreciation expense | $130,000 | - | - | - | ||||
Accumulated depreciation-Computer equipment | $130,000 | - | ||||||||
[To record depreciation expense] | ||||||||||
b | Dec.31,2019 | Insurance expense [$13,680 x (4 months/24 months] | $2,280 | - | - | - | ||||
Prepaid insurance | $2,280 | - | ||||||||
[To record insurance expense] | ||||||||||
c | Dec.31,2019 | Accounts receivable | $5,750 | + | ||||||
Service revenue | $5,750 | + | + | + | ||||||
[To record accrued service revenue] | ||||||||||
d | Dec.31,2019 | Rent expense [10 terminals x $54 x 1/2] | $270 | - | - | - | ||||
Rent payable | $270 | + | ||||||||
[To record accrued rent expense] | ||||||||||
e | Dec.31,2019 | Unearned rent revenue | $1,840 | - | ||||||
Rent revenue | $1,840 | + | + | + | ||||||
[To record earned revenue from unearned] |
Requirement 2:
a | Net income and Stockholders' equity would Decrease and Asset would decrease |
b | Net income and Stockholders' equity would Decrease and Asset would decrease |
c | Net income and Stockholders' equity would Increase and Asset would Increase |
d | Net income and Stockholders' equity would Decrease and Liabilities would increase |
e | Net income and Stockholders' equity would Increase and Liabilities would decrease |
Instructions Reynolds Computer Service offers data processing services to retail clothing stores. The following data have...
Adjusting Entries Reynolds Computer Service offers data processing services to retail clothing stores. The following data have been collected to aid in the preparation of adjusting entries for Reynolds Computer Service for 2019: a. Computer equipment was purchased from IBM in 2016 at a cost of $540,000. Annual depreciation is $127,600 b. A fire insurance policy for a 2 year period beginning September 1, 2019, was purchased from Good Hands Insurance Company for $8,520 cash. The entire amount of the...
Exercise 3-53 (Algorithmic) Adjusting Entries Reynolds Computer Service offers data processing services to retail clothing stores. The following data have been collected to aid in the preparation of adjusting entries for Reynolds Computer Service for 2019: a. Computer equipment was purchased from IBM in 2016 at a cost of $540,000. Annual depreciation is $125,900. b. A fire insurance policy for a 2-year period beginning September 1, 2019, was purchased from Good Hands Insurance Company for $12,000 cash. The entire amount...
Instructions a. Computer equipment was purchased from IBM in 2016 at a cost of $540,000. Annual depreciation is $150,000 b. A fire insurance policy for a 2-year period beginning September 1, 2019, was purchased from Good Hands Insurance Company for $13,440 cash. The entire amount of the prepayment was debited to prepaid Insurance. (Assume that the beginning balance of prepaid insurance was $0 and that there were no other debits or credits to that account during 2019.) c. Reynolds has...
Instructions Faraday Electronic Service repairs stereos and DVD players. During 2019, Faraday engaged in the following activities: a. On September 1, Faraday paid Wausau Insurance $4,860 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance, b. At December 31, Faraday estimates that $1,520 of utility costs are unrecorded and unpaid. C. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $1,440 is unpaid and unrecorded...
Instructions Faraday Electronic Service repairs stereos and DVD players. During 2019, Faraday engaged in the following activities: a. On September 1, Faraday paid Wausau Insurance $4,860 for its liability insurance for the next 12 months. The full amount of the prepayment was debited to prepaid insurance. b. At December 31, Faraday estimates that $1,520 of utility costs are unrecorded and unpaid. c. Faraday rents its testing equipment from JVC. Equipment rent in the amount of $1,440 is unpaid and unrecorded...
Instructions Sentry Transport Inc. of Atlanta provides in-town parcel delivery services in addition to a full range of passenger services. Sentry engaged in the following activities during the current year: a. Sentry received $5,000 cash in advance from Rich's Department Store for an estimated 250 deliveries during December 2019 and January and February of 2020. The entire amount was recorded as unearned revenue when received. During December 2019, 110 deliveries were made for Rich's. b. Sentry operates several small buses...
Sentry Transport Inc. of Atlanta provides in-town parcel delivery services in addition to a full range of passenger services. Sentry engaged in the following activities during the current year: a. Sentry received $5,000 cash in advance from Rich's Department Store for an estimated 250 deliveries during December 2019 and January and February of 2020. The entire amount was recorded as unearned revenue when received. During December 2019, 110 deliveries were made for Rich's. b. Sentry operates several small buses that...
Unsure why this is incorrect Instructions McDonald Marina provides docking and cleaning services for pleasure boats at its marina in southern Florida. The following accou balances are available: $ 237,000 Accounts payable S 26,600 Interest expense 268,700 Interest payable Accounts receivable 19,000 Accumulated depreciation (building) 64,800 Land 876,000 Accumulated depreciation (equipment) Rent expense 950,200 14,500 Bonds payable (due 2024) Rent payable 2,000,000 2,500 Retained earnings, 12/31/2018 Building 197,200 138,500 Service revenue (cleaning) Cash 22,500 472,500 Common stock (40,000 shares) Service...
B. Below are 4 adjusting journal entries (AJEs) that another firm, Wolverine, failed to make at year end. For each entry NOT MADE indicate the effect that each omitted AJE would have on the Wolverine's financial statements for the year ended 12/31/2019. Use O for overstated, U for understated, and NE for no effect. Organize your answer in tabular form, using the column headings shown below and provided in the worksheet titled "Part A, Question B." Example 0: At year...
Financial Statements and Closing Entries The adjusted trial balance shown below is for Fine Consulting Service as of December 31. Byran Sharpe made no capital contributions during the year. SHARPE CONSULTING SERVICE Adjusted Trial Balance December 31 Debit Credit Cash $2,900 Accounts Receivable 3,270 Supplies 5,060 Prepaid Insurance 1,500 Equipment 6,400 Accum. Depr. - Equipment $1,080 Accounts Payable 845 Long - Term Notes Payable 7,200 Common Stock 2,800 Retained Earnings 5,205 Dividends 2,900 Service Fees Earned 62,600 Rent Expense 15,500...