Question

Practice Problem: Adjusting Entries Muldoon and Fuhr Company are in the process of preparing their financial statements for the YEAR ended December 31, 2009. The Company has provided you with the following selected account belances from its UNADJUSTED trial balance: DEBIT $20,000 18,000 195,000 CREDIT Cash Accounts Receivable Accumulated Depreciation Prepaid Insurance Supplies Expense Service Revenue Accounts Payable $18,000 75,000 5,000 110,000 20,000 3,000 ADDITIONAL DATA (a) At the end of the year it was determined that $1,000 of supplies were still on hand. b) The employees have earned money for work done during December, but for which they will not be paid until January of 2010. The amount was $7,000. (c) The Company paid their fire insurance on January 1, 2009 for three years in advance. (d) The machinery is expected to have a useful life of 20 years with an estimated scrap value (e) Customers paid the Company $72,000 in advance for services to be performed equally of $15,000. over 4 months-October 2009, November 2009, December 2009, January 2010、This amount is included in the Service Revenue account on the unadjusted trial balance. REQUIRED: ON THE NEXT PAGE, PREPARE THE PROPER ADJUSTING ENTRIES REQUIRED AT 12-31-09. SHOW ALL COMPUTATIONS CLEARLY!!! USE THE FORMAT PROVIDED. The Company adjusts its books yearly!!! BONUS: Show what the adjusting entry for item () would be if the Company initialy recorded the $75,000 in an Insurance expense account. DR: 12-31: CR: 41
ADJUSTING ENTRY COMPUTATION
0 0
Add a comment Improve this question Transcribed image text
Answer #1
Date Account title Debit credit
a supplies 1000
supplies expense 1000
[being supplies remaining at hand recorded ,so excess supplies expense reversed 5000-1000 ]
b salaries expense 7000
salaries payable 7000
c Insurance expense 25000
prepaid insurance 25000
[being insurance expired for one year (1 jan 2009-31dec 2009) out of 3 years 75000*1/3]
d Depreciation expense 9000
Accumulated depreciation -machinery 9000
[being depreciation for year recorded [(195000-15000)/20]
e service revenue 18000
unearned service revenue 18000
[being revenue for one month is still unearned out of 4 months 72000*1/4]

2)

Date Account title Debit credit
c prepaid insurance 50000
Insurance expense 50000
[being insurance for 2 years still not expired therefore excess expense reversed to prepaid account 75000
Add a comment
Know the answer?
Add Answer to:
Practice Problem: Adjusting Entries Muldoon and Fuhr Company are in the process of preparing their financial...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Adiusting Entry Practice Problem HINT: Before you make the adjusting entry, be sure to determine if...

    Adiusting Entry Practice Problem HINT: Before you make the adjusting entry, be sure to determine if they initially recorded that transactions under the regular approach or the alternative approach. Looking at the trial balance should help you make this determination. Welte and Moore Company are in the process of preparing their financial statements for the MONTH ended December 31, 2009. The Company has provided you with the following selected account balances form its UNADJUSTED trial balance: DEBIT CREDIT Cash s...

  • The JORDAN & AMANAY Company is in the process of preparing their financial statements for the...

    The JORDAN & AMANAY Company is in the process of preparing their financial statements for the YEAR ended December 31,2016. The Company has provided you with the following selected account balances from its UNADJUSTED trial balance: DEBIT $40,000 28,000 380,000 CREDIT Cash Accounts Receivable Machinery Accumulated Depreciation Insurance expense Supplies expense Service Revenue Accounts payable Miscellaneous expenses $15,000 24,000 6,000 21,000 40,000 5,000 ADDITIONAL DATA: (a) At the end of the year it was determined that S2000 of supplies were...

  • Exercise 3-7A Record adjusting entries (LO3-3) Golden Eagle Company prepares monthly financial statements for its bank....

    Exercise 3-7A Record adjusting entries (LO3-3) Golden Eagle Company prepares monthly financial statements for its bank. The November 30 adjusted trial balance includes the following account information: Supplies Prepaid Insurance Salaries Payable Deferred Revenue November 30 Debit Credit $1,950 7,800 $10,900 2,900 The following information is known for the month of December: 1. Purchases of supplies during December total $4,400. Supplies on hand at the end of December equal $3,450 2. No insurance payments are made in December. Insurance cost...

  • Problem 8 - Adjusting entry problem End of the Year 2010 Prepare adjusting entries for a...

    Problem 8 - Adjusting entry problem End of the Year 2010 Prepare adjusting entries for a company that prepares statements once per year on Dec. 31. 1. A $5000, 120 day loan was taken out at the bank on October 2, 2010. Interest on the loan is accrued at 6%. 2. The building was purchased June 1, 2008 for $100,000. At that time management assigned it a 20 year life and a $20,000 salvage value. 3. Insurance on the building...

  • Question: Option #1: Preparing Adjusting Entries in a Worksheet Following is the unadjusted trial balance o......

    Question: Option #1: Preparing Adjusting Entries in a Worksheet Following is the unadjusted trial balance o... Option #1: Preparing Adjusting Entries in a Worksheet Following is the unadjusted trial balance of Skylar Gaming, Inc. at the end of its first year of operations, December 31, 20x7: Account Name DR. CR. Cash $71,550 Accounts Receivable $25,200 Supplies $550 Prepaid Insurance $12,000 Equipment $31,750 Accumulated Depreciation-Equipment $4,050 Accounts Payable $6,700 Salaries Payable $0 Unearned Revenue $2,200 Common Stock $45,700 Retained Earnings $23,850...

  • A+T Williamson Company is making adjusting entries for the year ended December 31 of the current...

    A+T Williamson Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount to Prepaid Insurance on October 1. At December 31 of the current year, the following data relating to Shipping Supplies were obtained from the...

  • Option #1: Preparing Adjusting Entries in a Worksheet Following is the unadjusted trial balance of Skylar...

    Option #1: Preparing Adjusting Entries in a Worksheet Following is the unadjusted trial balance of Skylar Gaming, Inc. at the end of its first year of operations, December 31, 20x7: Account Name DR. CR. Cash $71,550 Accounts Receivable $25,200 Supplies $550 Prepaid Insurance $12,000 Equipment $31,750 Accumulated Depreciation-Equipment $4,050 Accounts Payable $6,700 Salaries Payable $0 Unearned Revenue $2,200 Common Stock $45,700 Retained Earnings $23,850 Dividends $3,500 Revenue $80,750 Depreciation Expense-Equipment $2,000 Salaries Expense $4,750 Insurance Expense $3,100 Rent Expense $4,200...

  • "Prepare Adjusting Journal Entries (given the information below), then an Adjusted Trial Balance given said information....

    "Prepare Adjusting Journal Entries (given the information below), then an Adjusted Trial Balance given said information. Prepare an Income statement, Retained Earnings, Statement, and a Classified Balance Sheet (in this order). Finally, answer the following questions: 1) 'What is the dollar amount for Net Income or Net loss?' 2) 'What is the dollar amount for Ending Retained Earning?' 3) 'What is the amount for total Current Assets?' 4) 'What is the dollar amount for Total Current Liabilities?' 5) 'What is...

  • accounting 200 financial statement homework #1 Graves Company Unadjusted Trial Balance December 31, 2018 116,000 30,000...

    accounting 200 financial statement homework #1 Graves Company Unadjusted Trial Balance December 31, 2018 116,000 30,000 6,000 18,000 110,600 15,000 75,000 Cash Accounts Receivable Supplies Prepaid Insurance Inventory Vehicle Equipment Accumulated Depreciation Accounts Payable Unearned Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings (1/1/2018) Dividends Service Revenue Repair Expense Delivery Expense Depreciation Expense Rent Expense Insurance Expense Wages Expense Supplies Expense Interest Expense Income Tax Expense Total 40,000 9,000 13,500 11,500 48,000 41,000 37,600 5,000 472,000 14,000 38,000...

  • Required information E4-5 (Static) Recording Adjusting Entries and Reporting Balances in Financial Statements LO4-1, 4-2 [The...

    Required information E4-5 (Static) Recording Adjusting Entries and Reporting Balances in Financial Statements LO4-1, 4-2 [The following information applies to the questions displayed below.] A+T Williamson Company is making adjusting entries for the year ended December 31 of the current year. In developing information for the adjusting entries, the accountant learned the following: A two-year insurance premium of $4,800 was paid on October 1 of the current year for coverage beginning on that date. The bookkeeper debited the full amount...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT