Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 6PB
At the end of August, the first month of operations, the following selected data were taken from the financial statements of Tucker Jacobs, an attorney:
In preparing the financial statements, adjustments for the following data were overlooked:
- • Unbilled fees earned at August 31, $31,900.
- •
Depreciation of equipment for August, $7,500. - • Accrued wages at August 31, $5,200.
- • Supplies used during August, $3,000.
Instructions
- 1.
Journalize the entries to record the omitted adjustments. - 2. Determine the correct amount of net income for August and the total assets, liabilities, and owner’s equity at August 31. In addition to indicating the corrected amounts, indicate the effect of each omitted adjustment by setting up and completing a columnar table similar to the following. The first adjustment is presented as an example.
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Use the following information for the Exercises below. (Algo)
[The following information applies to the questions displayed below.]
a. Wages of $6,000 are earned by workers but not paid as of December 31.
b. Depreciation on the company's equipment for the year is $10,840.
c. The Supplies account had a $390 debit balance at the beginning of the year. During the year, $5,221 of
supplies are purchased. A physical count of supplies at December 31 shows $572 of supplies available.
d. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of
insurance policies shows that $3,400 of unexpired insurance benefits remain at December 31.
e. The company has earned (but not recorded) $850 of interest revenue for the year ended December 31.
The interest payment will be received 10 days after the year-end on January 10.
f. The company has a bank loan and has incurred (but not recorded) interest expense of $5,000 for the
year ended December 31.…
show Journal entries for the following:
c. A bill for $150 was received and recorded in February for repairs and maintenance consumed in the current month. d. Consulting services recorded on sales receipt number 1004 for $2500 to Surf Rider Foundation were never performed even though cash had been received. Thus, the revenue had not been earned.
e. consulting services of $8500 performed performed on the last day of the month for a new customer Blazing Boards but not invoiced to the customer or recorded into the accounting records until a few days into the next month.
f. depreciation expense of $575 ($75 and $500 for Equipment and Furniture & Fixtures, respectively) needed to be recorded for the month.
A review of the accounting records of Rundle Manufacturing indicated that the company incurred the following payroll costs during the
month of March. Assume the company's financial statements are prepared in accordance with GAAP.
1. Salary of the company president-$31,400.
2. Salary of the vice president of manufacturing-$16,100.
3. Salary of the chief financial officer-$18,000.
4. Salary of the vice president of marketing-$15,600.
5. Salaries of middle managers (department heads, production supervisors) in manufacturing plant-$204,000.
6. Wages of production workers-$945,000.
7. Salaries of administrative secretaries-$103,000.
8. Salaries of engineers and other personnel responsible for maintaining production equipment-$169,000.
9. Commissions paid to sales staff-$255,000.
Required
a. What amount of payroll cost would be classified as SG&A expense?
b. Assuming that Rundle made 3,300 units of product and sold 2,475 of them during the month of March, determine the amount of
payroll cost…
Chapter 3 Solutions
Financial Accounting
Ch. 3 - How are revenues and expenses reported on the...Ch. 3 - Is the matching concept related to (a) the cash...Ch. 3 - Why are adjusting entries needed at the end of an...Ch. 3 - What is the difference between adjusting entries...Ch. 3 - Identify the four different categories of...Ch. 3 - If the effect of the debit portion of an adjusting...Ch. 3 - Prob. 7DQCh. 3 - Does every adjusting entry affect net income for a...Ch. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Indicate with a Yes or No whether or not each of...Ch. 3 - Indicate with a Yes or No whether or not each of...Ch. 3 - Classify the following items as (1) prepaid...Ch. 3 - Classify the following items as (1) prepaid...Ch. 3 - The supplies account had a beginning balance of...Ch. 3 - The prepaid insurance account had a beginning...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - Prob. 4PEBCh. 3 - At the end of the current year, 23,570 of fees...Ch. 3 - At the end of the current year, 17,555 of fees...Ch. 3 - We-Sell Realty Co. pays weekly salaries of 11,800...Ch. 3 - Prospect Realty Co. pays weekly salaries of 27,600...Ch. 3 - Prob. 7PEACh. 3 - The estimated amount of depreciation on equipment...Ch. 3 - For the year ending August 31, 2016, Mammalia...Ch. 3 - For the year ending April 30, 2016, Urology...Ch. 3 - For each of the following errors, considered...Ch. 3 - For each of the following errors, considered...Ch. 3 - Prob. 10PEACh. 3 - Prob. 10PEBCh. 3 - Classify the following items as (a) prepaid...Ch. 3 - The following accounts were taken from the...Ch. 3 - The balance in the supplies account, before...Ch. 3 - The supplies and supplies expense accounts at...Ch. 3 - At March 31, the end of the first month of...Ch. 3 - The balance in the prepaid insurance account,...Ch. 3 - The prepaid insurance account had a balance of...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - Prob. 9ECh. 3 - At the end of the current year, 22,650 of fees...Ch. 3 - The balance in the unearned fees account, before...Ch. 3 - The adjusting entry for accrued fees was omitted...Ch. 3 - Ocular Realty Co. pays weekly salaries of 16,600...Ch. 3 - Prob. 14ECh. 3 - Accrued salaries owed to employees for October 30...Ch. 3 - Assume that the error in Exercise 3-15 was not...Ch. 3 - Art Imaging Company was organized on April 1 of...Ch. 3 - The estimated amount of depreciation on equipment...Ch. 3 - The balance in the equipment account is...Ch. 3 - Prob. 20ECh. 3 - For a recent period, the balance sheet for Costco...Ch. 3 - Prob. 22ECh. 3 - The accountant for Healthy Life Company, a medical...Ch. 3 - If the net income for the current year had been...Ch. 3 - On December 31, a business estimates depreciation...Ch. 3 - The unadjusted and adjusted trial balances for...Ch. 3 - The accountant for Evas Laundry prepared the...Ch. 3 - The following data (in millions) are taken from...Ch. 3 - Prob. 29ECh. 3 - On March 31, 2016, the following data were...Ch. 3 - Selected account balances before adjustment for...Ch. 3 - Reliable Repairs Service, an electronics repair...Ch. 3 - Good Note Company specializes in the repair of...Ch. 3 - Rowland Company is a small editorial services...Ch. 3 - At the end of April, the first month of...Ch. 3 - Prob. 1PBCh. 3 - Selected account balances before adjustment for...Ch. 3 - Crazy Mountain Outfitters Co., an outfitter store...Ch. 3 - The Signage Company specializes in the maintenance...Ch. 3 - Reece Financial Services Co., which specializes in...Ch. 3 - At the end of August, the first month of...Ch. 3 - The unadjusted trial balance that you prepared for...Ch. 3 - Daryl Kirby opened Squid Realty Co. on January 1,...Ch. 3 - Prob. 2CPCh. 3 - Prob. 3CP
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