Question

Question 1

Ouellette Corporation began operations on January 2. Its year-end is December 31, and it adjusts its accounts annually. Selected transactions for the current year follow:

1.		On January 2, purchased supplies for $4,200 cash. A physical count on December 31 revealed that $730 of supplies were still on hand.
2.		Purchased a vehicle for $45,800 on April 1, paying $5,000 cash and signing a $40,800 bank loan for the balance. The vehicle is estimated to have a useful life of 3 years and the company uses straight-line depreciation.
3.		Purchased a $4,180, one-year insurance policy for cash on August 1. The policy came into effect on that date.
4.		Received a $1,980 advance cash payment from a client on November 9 for services to be performed in the future. As of December 31, half of these services had been completed.
5.		On December 1, the company rented additional office space for a six-month period starting on December 1 for $1,900 each month. It paid rent for the months of December and January in advance on this date.

A. For each of the above situations, prepare the journal entry for the original transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Sr no.	Date	Account Titles and Explanation	Debit	Credit
1.	*insert date*
2.	*insert date*
3.	*insert date*
4.	*insert date*
5.	*insert date*

B. For each of the above situations, prepare any adjusting entry required on December 31. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round all amounts to the nearest dollar.)

Sr no.	Date	Account Titles and Explanation	Debit	Credit
1.	December 31
2.	December 31
3.	December 31
4.	December 31
5.	December 31

Question 2

Zheng Corporation had the following selected transactions in the month of March. The company adjusts its accounts monthly.

1.		The company has a 10%, $12,840 bank loan payable due in one year. Interest is payable on the first day of each following month and was last paid on March 1.
2.		At the end of March, the company earned $250 interest on its investments. The bank deposited this amount in Zheng’s cash account on April 1.
3.		Zheng has five employees who each earn $400 a day. Salaries are normally paid on Mondays for work completed Monday through Friday of the previous week. Salaries were last paid on Monday, March 26. March 31 falls on a Saturday this year. Salaries will be paid next on Monday, April 2.
4.		At the end of March, the company owed the utility company $570 and the telephone company $350 for services received during the month. These bills were paid on April 10. (Hint: Use the Utilities Expense account for the utility and telephone services.)
5.		At the end of March, Zheng has earned a service revenue of $3,600 that it has not yet billed. It bills its clients for this amount on April 4. On April 30, it collects $2,400 of this amount due.

A. For each of the above situations, prepare the adjusting journal entry required on March 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all amounts to the nearest dollar. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Same chart layout as question 1B.

B. For each of the above situations, prepare the journal entry to record the subsequent cash transaction in April. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round all amounts to the nearest dollar. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Same chart layout as question 1B.

Answer 1

Ques 1

Jan-02	Office supplies	4200
	cash		4200
Apr-01	Equipment	45800
	Cash		5000
	Notes payable		40800
Aug-01	Prepaid insurance	4180
	cash		4180
Nov-09	Cash	1980
	Unearned revenue		1980
Dec-01	Prepaid rent	3800
	cash		3800

Dec-31	Supplies expense	3470
	office supplies		3470
	4200-730
Dec-31	Depreciation expense-Equipment	11450
	Accumulated depreciation-Equipment		11450
	45800/3*9/12
Dec-31	Insurance expense	1742
	prepaid insurance		1742
	4180/12*5
Dec-31	Unearned revenue	990
	service revenue		990
	(1980/20
Dec-31	Rent expense	1900
	prepaid rent		1900

Ques 2

Mar-31	Interest expense	107
	interesy payable		107
	12840*10%/12
Mar-31	Interest receivable	250
	interest revenue		250
Mar-31	Salaries expense	10000
	salaries payable		10000
	(5*400*5)
Mar-31	Utilities expense	920
	accounts payable		920
	(570+350)
Mar-31	Accounts receivable	3600
	service revenue		3600

Apr-01	Interest payable	107
	cash		107
Apr-02	Cash	250
	Interest receivable		250
Apr-10	Salaries payable	10000
	cash		10000
Apr-10	Accounts payable	920
	cash		920
Apr-30	Cash	2400
	Accounts receivable		2400