Question

1. 2. Tamarisk, Inc. has the following information available for accruals for the year ended December 31, 2022. The company adjusts its accounts annually. The December utility bill for $440 was unrecorded on December 31. Tamarisk paid the bill on January 11. Tamarisk is open 7 days a week and employees are paid a total of $3,640 every Monday for a 7-day (Monday-Sunday) workweek. December 31 is a Thursday, so employees will have worked 4 days (Monday, December 28-Thursday, December 31) that they have not been paid for by year-end. Employees will be paid next on January 4. Tamarisk signed a $46,800,5% bank loan on November 1, 2021, due in 2 years. Interest is payable on the first day of each following month. Tamarisk receives a fee from Pizza Shop next door for all pizzas sold to customers using Tamarisk's facility. The amount owed for December is $310, which Pizza Shop will pay on January 4. (Hint: Use the Service Revenue account.) Tamarisk rented some of its unused warehouse space to a client for $6,240 a month, payable the first day of the following month. It received the rent for the month of December on January 2. 3. 4. 5.

Answer 1

ANSWER

Dec 31 2022 Utility Expenses A/c Dr. $440

To Outstanding Expenses A/c $440

Dec 31 2022 Employees Compensation Expenses A/c ($3,640 / 7 days) X 4 days Dr. $2,080

To Employee dues A/c $2,080

Dec 31 2022 Interest Expenses ($46,800 X 5% X 1/12) Expenses A/c $195

  To Interest payables A/c $195

Dec 31 2022 Trade receivable A/c Dr. 310

  To Service Revenue A/c $310

Dec 31 2022 Rent receivable A/c $6,240

  To Rental Income A/c $6,240

Jan 11 2023 Outstanding Expenses A/c Dr. $440

To Cash A/c $440

Jan 4 2023 Employee dues A/c ($3,640 / 7 days) X 4 days Dr. $2,080

To Cash A/c $2,080

Jan 1 2023 Interest payables ($46,800 X 5% X 1/12) Expenses A/c $195

  To Cash A/c $195

Jan 4 2023 Trade receivable A/c Dr. 310

  To Trade receivable A/c $310

Jan 2 2023 Cash A/c $6,240

  To Rent receivable A/c $6,240

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