hhfma02.qc3.1_sh.tdxex
What are the distinctive features of accrual accounting and cash-basis accounting?
hhfma02.qc3.2_sh.tdxex
The revenue principle says:
hhfma02.qc3.3_sh.tdxex
Adjusting the accounts is the process of:
hhfma02.qc3.4_sh.tdxex
Which types of adjusting entries are natural opposites?
hha08.qc3.5_sh.tdxex
Assume that weekly payroll of
is
. December 31, end of the year, falls on Monday, and
will pay its employee on Friday for the full week. What adjusting entry will
make on
Monday, December 31? (Use five days as a full work week.)
hhfma02.qc3.6_sh.tdxex
should
gains a client who prepays
for a package of six physical training sessions.
collects the
in advance and will provide the training later. After two training sessions, what
report on its income statement?
hhfma02.qc3.7_sh.tdxex
Assume you prepay Hercules Workout World for a package of six physical training sessions. Which type of account
should you have in your records?
hha08.qc3.8_sh.tdxex
Unearned revenue is always a (an)
hha08.qc3.9_sh.tdxex
The adjusted trial balance shows
hha08.qc3.10_sh.tdxex
Accounting data flow from the
hhfma02.s3.1_sh.tdxex
Suppose you work summers house-sitting for people while they are away on vacation. Most of your customers pay you
and you have collected
from
immediately after you finish a job. A few ask you to send them a bill. It is now
.
cash-paying customers. Your remaining customers owe you
Requirements
1. How much service revenue would you have under the
a. cash basis?
b. accrual basis?
2. Which method of accounting provides more information about your house-sitting business?
Requirement 1. How much service revenue would you have under the (a) cash basis, and (b) accrual basis?
Requirement 2. Which method of accounting provides more information about your house-sitting business?
The
basis provides more information because it considers all the revenue you earned, including revenue earned on
basis also keeps a record of your receivables from customers. The
account. The
receivables and the revenue you earned on account.
basis ignores both your
hhfma02.s3.2_sh.tdxex
The
Law Firm uses a client database. Suppose
paid
for a computer.
Requirements
expenditure under
1. Describe how the business should account for the
a. the cash basis.
b. the accrual basis.
2. State why the accrual basis is more realistic for this situation.
Requirement 1. Describe how the business should account for the
accrual basis.
expenditure under (a) the cash basis and (b) the
Requirement 2. State why the accrual basis is more realistic for this situation.
The accrual basis is more realistic because
.
hhfma02.s3.3_s.tdxex
Arizona Magazine sells annual subscription for the 12 monthly magazines mailed out each year. The company collects cash in
advance and then mails out the magazines to subscribers each month.
Requirement
1. Apply the revenue principle to determine
a. when Arizona Magazine should record revenue for this situation.
b. the amount of revenue Arizona Magazine should record for the magazines mailed out January through March.
Requirement 1.
a. Arizona Magazine should record revenue after
.
b. The amount of revenue equals
of the annual subscription.
, not when
hhfma02.s3.4_sh.tdxex
Suppose on January 1 you prepaid apartment rent of
Requirement
1. At
for the full year.
, what are your two account balances for this situation?
Requirement 1. Identify the two accounts and give their balances at
.
hhfma02.s3.5_s.tdxex
On
1 your company prepaid six months of rent,
.
Requirement
1. What type of adjusting entry is this?
Requirement 1. This entry is a(an)
adjusting entry.
hhfma02.s3.6_sh.tdxex
On
1 your company prepaid six months of rent,
.
Requirements
payment.
1. Prepare the journal entry for the
2. Prepare the adjustng entry required at
3. Post to the two accounts involved and show their balances at
Requirement 1. Prepare the journal entry for the
then credits.)
Requirement 2. Prepare the adjusting entry required at
then credits.)
payment. (Remember, when creating journal entries, record debits first,
(Remember, when creating journal entries, record debits first,
Requirement 3. Post to the two accounts involved and show their balances at
Record the rent payment at the beginning of the month, next the rent expense, and then calculate the account balances in the
hhfma02.s3.6_sh.tdxex
T-accounts below.
hha08.s3.7_sh.tdxex
On
1 your company paid cash of
for computers that are expected to remain useful for
years. At the end of
years, the value of the computers is expected to be zero, so the depreciation is
per year.
Requirements
1 and the depreciation on
31 to T-accounts for the following accounts:
1. Post the purchase of
Computer equipment, Accumulated depreciation Computer equipment, and Depreciation expense Computer
31. (Assume that the journal entries have been completed.)
equipment. Show their balances at
31?
2. What is the computer equipment's book value at
Requirement 1. Post the purchase of
1 and the depreciation on
31 to T-accounts for the following accounts:
Computer equipment, Accumulated depreciation Computer equipment, and Depreciation expense Computer equipment. Show
31. (Assume that the journal entries have been completed.)
their balances at
(Round your answers to the nearest whole dollar.)
Requirement 2. Calculate the computer equipment's book value at
31.
hha08.s3.8_sh.tdxex
Travel borrowed
on
expense for the remainder of the fiscal year (
1, 2011, by signing a one-year note payable to
through
) is
.
Bank.
interest
Requirements
, 2011. Date the entry and include its explanation.
1. Make the adjusting entry to accrue interest expense at
2. Post to the T-accounts of the two accounts affected by the adjustment.
Requirement 1. Make the adjusting entry to accrue interest expense at
, 2011. Date the entry and include its
explanation. (Remember, when creating journal entries, record debits first, then credits.)
Requirement 2. Post to the T-accounts of the two accounts affected by the adjustment.
hhfma02.s3.9_sh.tdxex
Modern Magazine collects cash from subscribers in advance and then mails the magazines to subscribers over a one-year period.
Requirements
cash.
1. Journalize the entry to record the original receipt of
2. Journalize the adjusting entry that Modern Magazine makes to record the earning of
was collected in advance. Include an explanation for the entry.
(Remember, when creating journal entries, record debits first, then credits.)
Requirement 1. Journalize the entry to record the original receipt of
appropriate for this journal entry.
of subscription revenue that
cash. On the last line, select the explanation that is
Requirement 2. Journalize the adjusting entry that Modern Magazine makes to record the earning of
of subscription
revenue that was collected in advance. On the last line, select the explanation that is appropriate for this journal entry.
hha08.s3.10_sh.tdxex
Hair Stylists has begun the preparation of its
adjusted trial balance as follows:
(Click the icon to view the work sheet.)
Requirement 1. Complete
Year-end data includes the following:
(Click the icon to view the data.)
Requirement
1. Complete
adjusted trial balance. (Leave unused cells blank.)
adjusted trial balance.
hha08.s3.10_sh.tdxex
hha08.s3.10_sh.tdxex
Data Table
Data Table
a. Supplies on hand,
b. Depreciation,
c. Accrued interest expense,
hha08.s3.11_sh.tdxex
Hair Stylists' adjusted trial balance is as follows:
(Click the icon to view the adjusted trial balance.)
Requirement
1. Compute
net income for the year ended December 31, 2010.
hha08.s3.11_sh.tdxex
Data Table
hha08.s3.12_sh.tdxex
Hair Stylists' adjusted trial balance is as follows:
(Click the icon to view the adjusted trial balance.)
Requirement
1. Compute
Requirement 1. Compute
total assets at December 31, 2010.
total assets at December 31, 2010.
Select the appropriate asset accounts, enter the amounts from the adjusted trial balance and calculate total assets. (Use
parentheses or a minus sign for numbers to be subtracted.)
hha08.s3.12_sh.tdxex
Data Table
hhfma02.e3.13_sh.tdxex
is a photography business that shoots videos at college parties. The freshman class pays
in advance on
January 3 just to guarantee your services for its party to be held February 2. The sophomore class promises you a minimum of
for filming its formal dance and actually pays cash of
on January 28 at the party.
Requirements
1. Answer the following questions about the correct way to account for revenue under the accrual basis.
paid by the freshman class, on what date was revenue earned? Did the earnings occur on the
a. Considering the
same date cash was received?
paid by the sophomore class, on what date was revenue earned? Did the earnings occur on the
b. Considering the
same date cash was received?
Requirement 1a. Considering the
the same date cash was received?
a. Considering the
paid by the freshman class, the revenue was earned
Requirement 1b. Considering the
on the same date cash was received?
b. Considering the
paid by the freshman class, on what date was revenue earned? Did the earnings occur on
paid by the sophomore class, on what date was revenue earned? Did the earnings occur
paid by the sophomore class, the revenue was earned
hhfma02.e3.14_sh.tdxex
Catering, Inc., completed the following transactions during
(Click the icon to view the transactions.)
, 2012:
(Click the icon to view the requirements.)
Requirement 1. Prepare journal entries for each transaction. Use the accrual method of accounting. (When creating journal
entries, record debits first, then credits.)
Begin by journalizing the
Next, journalize the
1 transaction.
5 transaction.
Now prepare the journal entry for the
9 transaction.
hhfma02.e3.14_sh.tdxex
The
14 transaction can be journalize next.
Journalize the
23 transaction.
Next, make the adjusting entry for rent at
.
hhfma02.e3.14_sh.tdxex
Finally, accrue salary expense at
.
Requirement 2. Using the journal entries you prepared above as a guide, show whether each transaction would be handled as a
revenue or an expense, using both the accrual and the cash basis. (Enter "0" for any transactions that do not affect revenues or
expenses. Use parentheses or a minus sign for numbers to be subtracted.)
hhfma02.e3.14_sh.tdxex
Requirement 3. Calculate the amount of net income or net loss for
(Use parentheses or a minus sign to indicate a loss.)
Catering under the accrual and cash basis for
.
Requirement 4. Considering your results from requirement 3, which method gives the best picture of the true earnings of
Catering? Why?
gives the best picture of the true earnings of
The
the matching principle.
Cuisine because it
the revenue principle and
hhfma02.e3.14_sh.tdxex
Data Table
More Info
Requirements
1. Prepare journal entries for each transaction.
2. Using the journal entries as a guide, show whether each transaction would be handled as a
revenue or an expense using both the accrual and the cash by completing the table
provided.
3. After completing the table, calculate the amount of net income or net loss for
Catering under the accrual and cash basis for
.
4. Considering your results from requirement 3, which method gives the best picture of the
true earnings of
Catering? Why?
hhfma02.e3.15_s.tdxex
Identify the accounting concept or principle (there may be more than one) that gives the most direction on how to account for each
of the following situations:
a.
b.
c.
d.
The owner of a business desires monthly financial statements to measure the progress of the entity on an ongoing basis.
Expenses of the period total $5,500. This amount should be subtracted from revenue to compute the period's net income.
Expenses of $1,200 must be accrued in order to measure net income properly.
A customer states her intention to switch health clubs. The health club records no revenue.
For each situation, select the accounting concept(s) or principle(s) that gives the most direction on how to account for that
situation. We will look at each situation individually. (Leave unused cells blank.)
a. The owner of a business desires monthly financial statements to measure the progress of the entity on an ongoing basis.
b. Expenses of the period total $5,500. This amount should be subtracted from revenue to compute the period's net income.
c. Expenses of $1,200 must be accrued in order to measure net income properly.
d. A customer states her intention to switch health clubs. The health club records no revenue.
hhfma02.e3.16_sh.tdxex
Consider the facts presented in the following table for
, Inc.:
(Click the icon to view the table.)
Requirements
1. Complete the table by filling in the missing values.
2. Prepare the four journal entries for each situation. Label the journal entries by letter. (Remember, when creating journal
entries, record debits first, then credits. Explanations are not required.)
Requirement 1. Compute the missing amounts.
Requirement 2. Prepare the four journal entries, one for each situation.
Prepare the first journal entry for Situation A to record the rent expense.
Prepare the entry for Situation B for the payment of prepaid rent.
hhfma02.e3.16_sh.tdxex
Prepare the rent expense entry for Situation C.
Finally, prepare the entry for the payment of prepaid rent for Situation D.
hhfma02.e3.16_sh.tdxex
Data Table
hhfma02.e3.17_sh.tdxex
Consider the following independent situations at December 31, 2009.
(Click the icon to view the situations.)
Requirements
1. For each situation, indicate which category of adjustment is described.
2. Journalize the adjusting entry needed at December 31 for each situation. Use the letters to label the journal entries.
Requirement 1. For each situation, indicate which category of adjustment is described.
Requirement 2. Journalize the adjusting entry needed at December 31 for each situation. (Remember to record debits first, then
credits. Explanations are not required.)
a. Journalize the transaction for unearned rent revenue earned.
b. Journalize the employee salaries owed.
hhfma02.e3.17_sh.tdxex
c. Journalize the adjustment to the Supplies account.
d. Journalize the depreciation.
e. Journalize the insurance expense.
hhfma02.e3.17_sh.tdxex
More Info
1, a business collected
rent in advance, debiting Cash and crediting Unearned rent revenue. The tenant was paying one year's
a. On
rent in advance. At December 31, business must account for the amount of rent it has earned.
per day
Monday through Friday
and the business pays employees each Friday. This year December 31 falls on a
b. Salary expense is
.
. Supplies on hand total
.
c. The unadjusted balance of the Supplies account is
.
d. Equipment depreciation was
1, when business prepaid
for a two-year insurance policy, business debited Prepaid insurance and credited Cash.
e. On
hha08.e3.18_sh.tdxex
The accounting records of
Architect include the
following selected, unadjusted balances at March 31:
The data developed for the March 31 adjusting entries are
; Supplies, $
; Salary payable,
Accounts receivable,
$0; Unearned service revenue, $
; Service revenue,
;
Salary expense, $
; Supplies expense, $0.
Requirement
1. Open a T-account for each account and record the
adjustments directly in the T-accounts, keying each
adjustment by letter. Show each account's adjusted
balance. Journal entries are not required.
(Click the icon to view the data.)
Requirement 1. Record the adjustments directly in the T-accounts, keying each adjustment by letter. Show each account's
adjusted balance.
hha08.e3.18_sh.tdxex
Data Table
a.
b.
c.
d.
Service revenue accrued,
Unearned service revenue that has been earned,
Supplies on hand,
Salary owed to employee,
hha08.e3.19_sh.tdxex
Company, the cleaning service, started the preparation of its adjusted trial balance as follows:
(Click the icon to view the trial balance information.)
During the
months ended
, 2010,
(Click the icon to view the transactions.)
Requirement
1. Complete the adjusted trial balance. Key each adjustment by letter.
Requirement 1. Complete the adjusted trial balance. Key each adjustment by letter.
First, post the adjustments in the appropriate column of the trial balance. Then enter the adjusted balances in the last two columns.
(Leave unused cells blank. Complete all transactions before checking your answer.)
hha08.e3.19_sh.tdxex
hha08.e3.19_sh.tdxex
Data Table
(This information has been incorporated into the work sheets in the exercise. Therefore, the popup can be closed while you are working on the exercise.)
More Info
hha08.e3.19_sh.tdxex
a.
b.
c.
d.
e.
Used supplies of
Used up prepaid insurance of
Used up
of the equipment through depreciation
Accrued salary expense of
that
hasn't paid yet
Earned
of the unearned service revenue
hha08.e3.20_sh.tdxex
Refer to the work sheet of
Company at
, 2010.
(Click the icon to view the completed work sheet.)
Requirement
1. Journalize the five adjustments, all dated
, 2010. Explanations are not required.
Requirement 1. Journalize the five adjustments, all dated
creating journal entries, record debits first, then credits)
Journalize adjustment a.
Journalize adjustment b.
Journalize adjustment c.
, 2010. Explanations are not required. (Remember, when
hha08.e3.20_sh.tdxex
Journalize adjustment d.
Journalize adjustment e.
hha08.e3.20_sh.tdxex
Data Table
Page 3 of 3
hha08.e3.21_sh.tdxex
The adjusted trial balance of
follows but is incomplete.
(Click the icon the view the adjusted trial balance information.)
Requirements
1. Calculate and enter the adjustment amounts directly in the Adjustments columns.
2. Prepare each adjusting journal entry calculated in requirement 1. Date the entries and include explanations.
Requirement 1. Calculate and enter the adjustment amounts directly in the Adjustments columns.
Key each adjustment in the appropriate column by letter and then total the debit and credit columns.
hha08.e3.21_sh.tdxex
Requirement 2. Prepare each adjusting journal entry calculated in requirement 1. Date the entries and include explanations.
Journalize adjustment a.
hha08.e3.21_sh.tdxex
Journalize adjustment b.
Journalize adjustment c.
Journalize adjustment d.
hha08.e3.21_sh.tdxex
hha08.e3.21_sh.tdxex
Data Table
hha08.e3.22_sh.tdxex
The following data at January 31, 2011 is given for
.
(Click the icon to view the data.)
Requirements
1. Journalize the adjusting entries needed on January 31, 2011.
2. Suppose the adjustments made in requirement 1 were not made. Compute the overall overstatement or understatement of
net income as a result of the omission of these adjustments.
Requirement 1. Journalize the adjusting entries needed on January 31, 2011. (Remember to record debits first, then credits.
Explanations are not required.)
a. Journalize the depreciation.
b. Journalize the expired prepaid rent.
c. Journalize the transaction for accrued interest expense.
hha08.e3.22_sh.tdxex
d. Journalize the employee salaries owed.
e. Journalize the transaction for unearned service revenue earned.
Requirement 2. Suppose the adjustments made in requirement 1 were not made. Compute the overall overstatement or
understatement of net income as a result of the omission of these adjustments.
hha08.e3.22_sh.tdxex
Net income would be
by $
.
Data Table
a. Depreciation,
b. Prepaid rent expired,
c. Interest expense accrued,
d. Employee salaries owed for Monday through Thursday
of a five-day workweek; weekly payroll,
e. Unearned service revenue earned,
hha08.e3.23_sh.tdxex
The adjusted trial balances of
International at
31, 2012, and
31, 2011, include the following amounts:
(Click the icon to view the amounts.)
Analysis of the accounts at
31, 2012, reveals the following transactions for the fiscal year ending in 2012:
(Click the icon to view the transactions.)
Requirement
1. Compute the amount of Supplies expense, Salary expense, and Service revenue to report on the
statement for 2012.
International income
Requirement 1. Compute the amount of Supplies expense, Salary expense, and Service revenue to report on the
International income statement for 2012.
Begin by computing the amount of Supplies expense to report on the
the T-account below.
Compute the amount of Salary expense to report on the
below.
Compute the amount of Service revenue to report on the
below.
International income statement for 2012 by completing
International income statement for 2012 by completing the T-account
International income statement for 2012 by completing the T-account
hha08.e3.23_sh.tdxex
Data Table
More Info
hha08.e3.24_sh.tdxex
The adjusted trial balance of
Company, the cleaning service, follows:
(Click the icon to view adjusted trial balance.)
Requirements
1. Compute
2. Compute
Requirement 1. Compute
The net income of
Requirement 2. Compute
The total assets of
Company's net income for the period ended
Company's total assets at
, 2010.
, 2010.
Company's net income for the period ended
Company for the period ending
, 2010 is $
Company's total assets at
Company at
, 2010 is $
, 2010.
.
, 2010.
.
hha08.e3.24_sh.tdxex
Data Table
hha08.e3.25_sh.tdxex
The adjusted trial balance of
follows:
(Click the icon to view adjusted trial balance.)
Requirements
1. Prepare the income statement.
2. Prepare the statement of owner's equity. (There were no owner investments for the accounting period.)
3. Prepare the balance sheet.
Requirement 1. Prepare the income statement.
Requirement 2. Prepare the statement of owner's equity. (There were no owner investments for the accounting period. Complete
all answer boxes.)
hha08.e3.25_sh.tdxex
Requirement 3. Prepare the balance sheet.
Let's begin with the heading, then complete the asset portion of the balance sheet. In the final step, complete the liabilities and
owner's equity portions of the balance sheet.
hha08.e3.25_sh.tdxex
hha08.e3.25_sh.tdxex
Data Table
hha08.e3.26_sh.tdxex
The accountant for
, CPA has posted adjusting entries (a) through (e) to the accounts at
balance sheet accounts and all the revenues and expenses of the entity follow in T-account form.
(Click the icon to view the T-accounts.)
Requirements
1. Prepare the income statement of
2. Were 2011 operations successful?
, CPA, for the year ended
Requirement 1. Prepare the income statement of
, CPA, for the year ended
Requirement 2. Were 2011 operations successful?
Operations were
, as shown by the $
of
the business reported for the year.
Selected
hha08.e3.26_sh.tdxex
Data Table
Selected balance sheet accounts and all the revenues and expenses of the entity follow in T-account form.
hha08.e3.27_sh.tdxex
Interiors began the year with capital of
. On July 12,
received owner investment of
cash. The income statement for the year ended December 31, 2011, reported net income of
. During this fiscal year,
withdrew
each month.
Requirement
1. Prepare
Requirement 1. Prepare
Interiors' statement of owner's equity for the year ended December 31, 2011.
Interiors' statement of owner's equity for the year ended December 31, 2011.
hhfma02.p3.28a_sh.tdxex
Golf School completed the following transactions during
(Click the icon to view the transactions.)
(Click the icon to view the requirements.)
Requirement 1. Prepare journal entries for each transaction. Use the accrual method of accounting. (Remember, when creating
journal entries record debits first, then credits.)
Prepare the journal entries in chronological order. Begin with the first transaction on
on
4.
Now record the next two transactions. Record the
5 transaction, then the
1, then follow with the second transaction
8 transaction.
hhfma02.p3.28a_sh.tdxex
Next, record the following two transactions. Begin with the
11 transaction, and follow with the transaction on
Now record the next three transactions, one at a time, that occur on
24, 26 and 29, respectively.
19.
hhfma02.p3.28a_sh.tdxex
Finally, record the last two transactions in the order they appear in the data given.
Requirement 2. Using the journal entries as a guide, show whether each transaction would be handled as a revenue or an
expense, using both the accrual and cash basis.
Begin by showing how each transaction would be handled using the accrual basis of accounting. (Enter "0" for any transactions
that do not affect revenues or expenses. Use parentheses or a minus sign for expenses.)
hhfma02.p3.28a_sh.tdxex
Now show how each transaction would be handled using the cash basis of accounting. (Enter "0" for any transactions that do not
affect revenues or expenses. Use parentheses or a minus sign for expenses.)
hhfma02.p3.28a_sh.tdxex
Requirement 3. Using the tables you completed in requirement 2, compute net income for
cash basis of accounting. (Use parentheses or a minus sign to show a net loss.)
$
Accrual basis net income (loss)
Cash basis net income (loss)
under the accrual basis and
=
$
Requirement 4. Considering your results from requirement 3, which method gives the best picture of the true earnings of
Golf School, Inc.? Why?
hhfma02.p3.28a_sh.tdxex
Data Table
1
4
5
8
11
19
24
26
Prepaid insurance for
through
,
Performed services (gave golf lessons) on account,
Purchased equipment on account,
Paid property tax expense,
Purchased office equipment for cash,
Performed services and received cash,
on account
Collected
5
Paid account payable from
29 Paid salary expense,
31 Recorded adjusting entry for
insurance expense (see
1)
31 Debited unearned revenue and credited revenue in an adjusting entry,
More Info
Requirements
1. Prepare journal entries for each transaction.
2. Using the journal entries as a guide, show whether
each transaction would be handled as a revenue or
an expense, using both the accrual and cash basis.
3. Calculate the amount of net income or net loss for the
company under the accrual and cash basis for
.
4. Considering your results from requirement 3, which
method gives the best picture of the true earnings of
Golf School? Why?
hhfma02.p3.29a_sh.tdxex
Landscaping has the following independent cases at the end of the year on
31, 2011.
(Click the icon to view the independent cases.)
Requirement
1. Journalize the adjusting entry needed on
31, 2011, for each of the previous items affecting
Landscaping.
Requirement 1. Journalize the adjusting entry needed on
31, 2011, for each of the previous items affecting
Landscaping. (For adjusting journal entries, remember to record debits first and then credits. Round your answers to the nearest
whole dollar.)
a.
on a
pays employees each Friday. The amount of the weekly payroll is
.
Journalize the accrual for salaries at
b.
for a five-day workweek.
.
prepays a full year's insurance each year on January 1 in the amount of
Journalize the insurance expense for the year ended
.
.
falls
hhfma02.p3.29a_sh.tdxex
c. The beginning balance of Supplies was
the supplies on hand total
.
. During the year,
purchased supplies for
, and at
Journalize the supplies expense for the year.
d.
designed a landscape plan, and the client paid
at the start of the project.
recorded this
amount as unearned service revenue. The job will take several months to complete, and
estimates that the company has
earned
of the total revenue during the current year.
Journalize the service revenue earned at
.
hhfma02.p3.29a_sh.tdxex
e. Depreciation for the current year includes Equipment,
Make the compound entry to journalize the depreciation.
; and Trucks,
. Make a compound entry.
hhfma02.p3.29a_sh.tdxex
Data Table
pays employees for the current week's work. The amount of the
a. Each Friday,
weekly payroll is
for a five-day workweek. This year
falls on a
.
b. Details of Prepaid insurance are shown in the account:
prepays a full year's insurance each year on January 1. Record insurance
expense for the year ended
.
. During the year,
purchased
c. The beginning balance of Supplies was
supplies for
, and at
the supplies on hand total
.
designed a landscape plan, and the client paid
at the start of
d.
the project.
recorded this amount as Unearned service revenue. The job will
take several months to complete, and
estimates that the company has earned
% of the total revenue during the current year.
; and Trucks,
.
e. Depreciation for the current year includes Equipment,
Make a compound entry.
(For your convenience, the descriptions of the transactions shown in this pop-up have been fully integrated into the directions for each journal entry, so you
may now close the pop-up while solving this problem.)
hha08.p3.30a_sh.tdxex
Production Company unadjusted and adjusted trial balances at December 31, 2012, follow.
(Click the icon to view the unadjusted and adjusted trial balances.)
Requirement
1. Journalize the adjusting entries that account for the differences between the two trial balances.
Requirement 1. Journalize the adjusting entries that account for the differences between the two trial balances. (Remember, when
creating journal entries, record debits first, then credits.)
The first difference occurs in the Accounts receivable account. Journalize the adjustment to Accounts receivable and the related
account.
The second difference occurs in the Supplies account. Journalize the adjustment to Supplies and the related account.
The third difference occurs in the Prepaid insurance account. Journalize the adjustment to Prepaid insurance and the related
account.
hha08.p3.30a_sh.tdxex
The fourth difference occurs in the Accumulated depreciation account. Journalize the adjustment to Accumulated depreciation and
the related account.
The fifth difference occurs in the Salary payable account. Journalize the adjustment to Salary payable and the related account.
hha08.p3.30a_sh.tdxex
Data Table
hha08.p3.31a_sh.tdxex
The trial balance of
follow.
(Click the icon to view the trial balance.)
at December 31, 2011, and the data needed for the month-end adjustments
(Click the icon to view the adjusting entry information.)
Requirements
1. Journalize the adjusting entries.
2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to the ledger
accounts.
3. Prepare the adjusted trial balance.
use the adjusted trial balance?
4. How will
Requirement 1. Journalize the adjusting entries. (Remember, when creating journal entries, record debits first, then credits.)
a. Journalize the transaction for unearned service revenue. Unearned service revenue still unearned,
b. Journalize the adjustment to prepaid rent. Prepaid rent still in force,
.
c. Journalize the adjustment to the supplies account. Supplies used during the month,
.
.
hha08.p3.31a_sh.tdxex
d. Journalize the depreciation for the month,
.
e. Journalize accrued advertising expense,
f. Journalize accrued salary expense,
. (Credit Accounts payable.)
.
hha08.p3.31a_sh.tdxex
Requirement 2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to
the ledger accounts. Select the appropriate journal entry letter under the heading "Item".
Post journal entry a. to the general ledger accounts.
Post journal entry b. to the general ledger accounts.
hha08.p3.31a_sh.tdxex
Post journal entry c. to the general ledger accounts.
hha08.p3.31a_sh.tdxex
Post journal entry d. to the general ledger accounts.
Post journal entry e. to the general ledger accounts.
hha08.p3.31a_sh.tdxex
Post journal entry f. to the general ledger accounts.
hha08.p3.31a_sh.tdxex
Requirement 3. Prepare the adjusted trial balance.
hha08.p3.31a_sh.tdxex
Requirement 4. How will
The company will use the adjusted trial balance to
use the adjusted trial balance?
.
hha08.p3.31a_sh.tdxex
Data Table
hha08.p3.31a_sh.tdxex
More Info
Adjustment data at December 31:
a. Unearned service revenue still unearned,
b. Prepaid rent still in force,
c. Supplies used during the month,
d. Depreciation for the month,
. (Credit
e. Accrued advertising expense,
Accounts payable)
f. Accrued salary expense,
hha08.p3.32a_sh.tdxex
The trial balance of
follow.
(Click the icon to view the trial balance.)
at December 31, 2010, and the data needed for the month-end adjustments
(Click the icon to view the data.)
Requirements
1. Journalize the adjusting entries.
2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to the ledger
accounts.
3. Prepare the adjusted trial balance.
4. Prepare the income statement, statement of owner's equity and balance sheet for the business for the month ended
December 31, 2010. (There were no owner investments for the accounting period.)
Requirement 1. Journalize the adjusting entries. (Remember, when creating journal entries, record debits first, then credits.)
a. Prepaid insurance still in force,
b. Supplies used during the month,
hha08.p3.32a_sh.tdxex
c. Depreciation for the month,
d. Accrued salary expense,
e. Unearned service revenue still unearned,
hha08.p3.32a_sh.tdxex
Requirement 2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to
the ledger accounts.
Select the appropriate journal entry letter under the heading "Item".
Post journal entry a. to the general ledger accounts.
Post journal entry b. to the general ledger accounts.
hha08.p3.32a_sh.tdxex
Post journal entry c. to the general ledger accounts.
hha08.p3.32a_sh.tdxex
Post journal entry d. to the general ledger accounts.
Post journal entry e. to the general ledger accounts.
hha08.p3.32a_sh.tdxex
Requirement 3. Prepare the adjusted trial balance.
hha08.p3.32a_sh.tdxex
Requirement 4. Prepare the income statement, statement of owner's equity and balance sheet for the business for the month
ended December 31, 2010.
Prepare the income statement.
hha08.p3.32a_sh.tdxex
Prepare the statement of owner's equity. (There were no owner investments for the accounting period. Complete all answer
boxes.)
hha08.p3.32a_sh.tdxex
Finally, prepare the balance sheet. Begin with the heading, then complete the balance sheet.
hha08.p3.32a_sh.tdxex
Data Table
hha08.p3.32a_sh.tdxex
More Info
Adjustment data at December 31:
a. Prepaid insurance still in force,
b. Supplies used during the month,
c. Depreciation for the month,
d.
e.
Accrued salary expense,
Unearned service revenue still unearned,
hha08.p3.33a_sh.tdxex
Consider the unadjusted trial balance of
data.
(Click the icon to view the month-end adjustment data.)
Company at
, 2012, and the related month-end adjustment
(Click the icon to view the unadjusted trial balance.)
Requirements
at
1. Using the work sheet, prepare the adjusted trial balance of
balances have been entered for you. Key each adjusting entry by letter.
2. Prepare the income statement and the statement of owner's equity for the month ended
sheet at that date. (There were no owner's investments for the period.)
, 2012. The unadjusted
, 2012, and the balance
Requirement 1. Using the work sheet, prepare the adjusted trial balance of
at
, 2012. The
unadjusted balances have been entered for you. Key each adjusting entry by letter. Calculate the total debits and credits.
hha08.p3.33a_sh.tdxex
Requirement 2. Prepare the income statement and the statement of owner's equity for the month ended
Balance Sheet at that date.
, 2012, and the
hha08.p3.33a_sh.tdxex
Begin by preparing the Income Statement for the month ended
Prepare the Statement of Owner's Equity for the month ended
Complete all input boxes.)
, 2012.
, 2012. (There were no owner's investments for the period.
hha08.p3.33a_sh.tdxex
Prepare the balance sheet. Begin with the heading.
hha08.p3.33a_sh.tdxex
Data Table
Adjustment data at
, 2012:
,
a. Accrued service revenue at
One-fifth
of
the
prepaid
rent
expired
during
the month
b.
,
c. Supplies on hand at
d. Depreciation on automobile for the month,
for one day only. The
e. Accrued salary expense at
five-day weekly payroll is
.
More Info
hha08.p3.33a_sh.tdxex
hha08.p3.34a_sh.tdxex
The adjusted trial balance of
Piano Tuning Service at fiscal year end
(Click the icon to view adjusted trial balance.)
Requirement 1. Prepare
31, 2011, follows.
(Click the icon to view the requirements.)
2011 income statement.
Let's start with the preparation of the income statement. Begin with the header. Then complete the income statement by entering
the accounts, labels, and amounts and calculating net income.
Requirement 2. Prepare the statement of owner's equity for the year. (There were no owner's investments for the year. Complete
all answer boxes.)
hha08.p3.34a_sh.tdxex
Requirement 3. Prepare the year-end balance sheet.
Begin with the header. Then list the appropriate accounts and amounts. Label and total each section of the report.
hha08.p3.34a_sh.tdxex
Requirement 4. Which financial statement reports the company's results of operations?
Were the 2011 operations successful?
Requirement 5. Which statement reports the company's financial position?
hha08.p3.34a_sh.tdxex
Data Table
hha08.p3.34a_sh.tdxex
More Info
hha08.p3.34a_sh.tdxex
Requirements
2011 income statement.
1. Prepare
2. Prepare the statement of owner's equity for the year.
3. Prepare the year-end balance sheet.
results of operations?
4. Which financial statement reports
Were the 2011 operations successful? Cite specifics from the
financial statements to support your evaluation.
5. Which statement reports the company's financial position?
hhfma02.p3.35b_sh.tdxex
Golf School completed the following transactions during
(Click the icon to view the transactions.)
(Click the icon to view the requirements.)
Requirement 1. Prepare journal entries for each transaction. Use the accrual method of accounting. (Remember, when creating
journal entries record debits first, then credits.)
Prepare the journal entries in chronological order. Begin with the first transaction on
transaction on
4.
Now record the next two transactions. Record the
5 transaction, then the
1, then follow with the second
8 transaction.
hhfma02.p3.35b_sh.tdxex
Next, record the following two transactions. Begin with the
11 transaction, and follow with the transaction on
Now record the next three transactions, one at a time, that occur on
24, 26 and 29, respectively.
19.
hhfma02.p3.35b_sh.tdxex
Finally, record the last two transactions in the order they appear in the data given.
Requirement 2. Using the journal entries as a guide, show whether each transaction would be handled as a revenue or an
expense, using both the accrual and cash basis.
Begin by showing how each transaction would be handled using the accrual basis of accounting. (Enter "0" for any transactions
that do not affect revenues or expenses. Use parentheses or a minus sign for expenses.)
hhfma02.p3.35b_sh.tdxex
Now show how each transaction would be handled using the cash basis of accounting. (Enter "0" for any transactions that do not
affect revenues or expenses. Use parentheses or a minus sign for expenses.)
hhfma02.p3.35b_sh.tdxex
Requirement 3. Using the tables you completed in requirement 2, compute net income for
cash basis of accounting. (Use parentheses or a minus sign to show a net loss.)
$
Accrual basis net income (loss)
Cash basis net income (loss)
under the accrual basis and
=
$
Requirement 4. Considering your results from requirement 3, which method gives the best picture of the true earnings of
Golf School, Inc.? Why?
hhfma02.p3.35b_sh.tdxex
Data Table
1
4
5
8
11
19
24
26
Prepaid insurance for
through
,
Performed services (gave golf lessons) on account,
Purchased equipment on account,
Paid property tax expense,
Purchased office equipment for cash,
Performed services and received cash,
on account
Collected
5
Paid account payable from
29 Paid salary expense,
31 Recorded adjusting entry for
insurance expense (see
1)
31 Debited unearned revenue and credited revenue in an adjusting entry,
More Info
Requirements
1. Prepare journal entries for each transaction.
2. Using the journal entries as a guide, show whether
each transaction would be handled as a revenue or
an expense, using both the accrual and cash basis.
3. Calculate the amount of net income or net loss for the
company under the accrual and cash basis for
.
4. Considering your results from requirement 3, which
method gives the best picture of the true earnings of
Golf School? Why?
hhfma02.p3.36b_sh.tdxex
Landscaping has the following independent cases at the end of the year on
31, 2011.
(Click the icon to view the independent cases.)
Requirement
1. Journalize the adjusting entry needed on
31, 2011, for each of the previous items affecting
Landscaping.
Requirement 1. Journalize the adjusting entry needed on
31, 2011, for each of the previous items affecting
Landscaping. (For adjusting journal entries, remember to record debits first and then credits. Round your answers to the nearest
whole dollar.)
a.
pays employees each Friday. The amount of the weekly payroll is
.
Journalize the accrual for salaries at
b.
for a five-day workweek.
.
prepays a full year's insurance each year on January 1 in the amount of
Journalize the insurance expense for the year ended
.
.
falls on a
hhfma02.p3.36b_sh.tdxex
c. The beginning balance of Supplies was
supplies on hand total
.
. During the year,
purchased supplies for
, and at
the
Journalize the supplies expense for the year.
d.
designed a landscape plan, and the client paid
at the start of the project.
recorded this amount as
unearned service revenue. The job will take several months to complete, and
estimates that the company has earned
the total revenue during the current year.
Journalize the service revenue earned at
.
of
hhfma02.p3.36b_sh.tdxex
e. Depreciation for the current year includes Equipment,
Make the compound entry to journalize the depreciation.
; and Trucks,
. Make a compound entry.
hhfma02.p3.36b_sh.tdxex
Data Table
pays employees for the current week's work. The amount of the
a. Each Friday,
weekly payroll is
for a five-day workweek. This year
falls on a
.
b. Details of Prepaid insurance are shown in the account:
prepays a full year's insurance each year on January 1. Record insurance
expense for the year ended
.
. During the year,
purchased
c. The beginning balance of Supplies was
supplies for
, and at
the supplies on hand total
.
designed a landscape plan, and the client paid
at the start of the
d.
project.
recorded this amount as Unearned service revenue. The job will take
several months to complete, and
estimates that the company has earned % of
the total revenue during the current year.
; and Trucks,
.
e. Depreciation for the current year includes Equipment,
Make a compound entry.
(For your convenience, the descriptions of the transactions shown in this pop-up have been fully integrated into the directions for each journal entry, so you
may now close the pop-up while solving this problem.)
hha08.p3.37b_sh.tdxex
Production Company unadjusted and adjusted trial balances at December 31, 2012, follow.
(Click the icon to view the unadjusted and adjusted trial balances.)
Requirement
1. Journalize the adjusting entries that account for the differences between the two trial balances.
Requirement 1. Journalize the adjusting entries that account for the differences between the two trial balances. (Remember, when
creating journal entries, record debits first, then credits.)
The first difference occurs in the Accounts receivable account. Journalize the adjustment to Accounts receivable and the related
account.
The second difference occurs in the Supplies account. Journalize the adjustment to Supplies and the related account.
The third difference occurs in the Prepaid insurance account. Journalize the adjustment to Prepaid insurance and the related
account.
hha08.p3.37b_sh.tdxex
The fourth difference occurs in the Accumulated depreciation account. Journalize the adjustment to Accumulated depreciation and
the related account.
The fifth difference occurs in the Salary payable account. Journalize the adjustment to Salary payable and the related account.
hha08.p3.37b_sh.tdxex
Data Table
hha08.p3.38b_sh.tdxex
The trial balance of
follow.
(Click the icon to view the trial balance.)
at December 31, 2011, and the data needed for the month-end adjustments
(Click the icon to view the adjusting entry information.)
Requirements
1. Journalize the adjusting entries.
2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to the ledger
accounts.
3. Prepare the adjusted trial balance.
use the adjusted trial balance?
4. How will
Requirement 1. Journalize the adjusting entries. (Remember, when creating journal entries, record debits first, then credits.)
a. Journalize the transaction for unearned service revenue. Unearned service revenue still unearned,
b. Journalize the adjustment to prepaid rent. Prepaid rent still in force,
.
c. Journalize the adjustment to the supplies account. Supplies used during the month,
.
.
hha08.p3.38b_sh.tdxex
d. Journalize the depreciation for the month,
.
e. Journalize accrued advertising expense,
f. Journalize accrued salary expense,
. (Credit Accounts payable.)
.
hha08.p3.38b_sh.tdxex
Requirement 2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to
the ledger accounts. Select the appropriate journal entry letter under the heading "Item".
Post journal entry a. to the general ledger accounts.
Post journal entry b. to the general ledger accounts.
hha08.p3.38b_sh.tdxex
Post journal entry c. to the general ledger accounts.
hha08.p3.38b_sh.tdxex
Post journal entry d. to the general ledger accounts.
Post journal entry e. to the general ledger accounts.
hha08.p3.38b_sh.tdxex
Post journal entry f. to the general ledger accounts.
hha08.p3.38b_sh.tdxex
Requirement 3. Prepare the adjusted trial balance.
hha08.p3.38b_sh.tdxex
Requirement 4. How will
The company will use the adjusted trial balance to
use the adjusted trial balance?
.
hha08.p3.38b_sh.tdxex
Data Table
hha08.p3.38b_sh.tdxex
More Info
Adjustment data at December 31:
a. Unearned service revenue still unearned,
b. Prepaid rent still in force,
c. Supplies used during the month,
d. Depreciation for the month,
. (Credit
e. Accrued advertising expense,
Accounts payable)
f. Accrued salary expense,
hha08.p3.39b_sh.tdxex
The trial balance of
at December 31, 2010, and the data needed for the month-end adjustments follow.
(Click the icon to view the trial balance.)
(Click the icon to view the data.)
Requirements
1. Journalize the adjusting entries.
2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to the ledger
accounts.
3. Prepare the adjusted trial balance.
4. Prepare the income statement, statement of owner's equity and balance sheet for the business for the month ended
December 31, 2010. (There were no owner investments for the accounting period.)
Requirement 1. Journalize the adjusting entries. (Remember, when creating journal entries, record debits first, then credits.)
a. Prepaid insurance still in force,
b. Supplies used during the month,
hha08.p3.39b_sh.tdxex
c. Depreciation for the month,
d. Accrued salary expense,
e. Unearned service revenue still unearned,
Requirement 2. The unadjusted balances have been entered for you in the general ledger accounts. Post the adjusting entries to
hha08.p3.39b_sh.tdxex
the ledger accounts.
Select the appropriate journal entry letter under the heading "Item".
Post journal entry a. to the general ledger accounts.
Post journal entry b. to the general ledger accounts.
hha08.p3.39b_sh.tdxex
Post journal entry c. to the general ledger accounts.
hha08.p3.39b_sh.tdxex
Post journal entry d. to the general ledger accounts.
Post journal entry e. to the general ledger accounts.
hha08.p3.39b_sh.tdxex
Requirement 3. Prepare the adjusted trial balance.
hha08.p3.39b_sh.tdxex
Requirement 4. Prepare the income statement, statement of owner's equity and balance sheet for the business for the month
ended December 31, 2010.
Prepare the income statement.
hha08.p3.39b_sh.tdxex
Prepare the statement of owner's equity. (There were no owner investments for the accounting period. Complete all answer
boxes.)
hha08.p3.39b_sh.tdxex
Finally, prepare the balance sheet. Begin with the heading, then complete the balance sheet.
hha08.p3.39b_sh.tdxex
Data Table
hha08.p3.39b_sh.tdxex
More Info
Adjustment data at December 31:
a. Prepaid insurance still in force,
b. Supplies used during the month,
c. Depreciation for the month,
d.
e.
Accrued salary expense,
Unearned service revenue still unearned,
hha08.p3.40b_sh.tdxex
Consider the unadjusted trial balance of
adjustment data.
(Click the icon to view the month-end adjustment data.)
Company at
, 2012, and the related month-end
(Click the icon to view the unadjusted trial balance.)
Requirements
at
1. Using the work sheet, prepare the adjusted trial balance of
balances have been entered for you. Key each adjusting entry by letter.
2. Prepare the income statement and the statement of owner's equity for the month ended
Sheet at that date. (There were no owner's investments for the period.)
, 2012. The unadjusted
, 2012, and the Balance
Requirement 1. Using the work sheet, prepare the adjusted trial balance of
at
, 2012. The
unadjusted balances have been entered for you. Key each adjusting entry by letter. Calculate the total debits and credits.
hha08.p3.40b_sh.tdxex
Requirement 2. Prepare the income statement and the statement of owner's equity for the month ended
the Balance Sheet at that date.
, 2012, and
hha08.p3.40b_sh.tdxex
Begin by preparing the Income Statement for the month ended
Prepare the Statement of Owner's Equity for the month ended
period. Complete all input boxes.)
, 2012.
, 2012. (There were no owner's investments for the
hha08.p3.40b_sh.tdxex
Prepare the balance sheet. Begin with the heading.
hha08.p3.40b_sh.tdxex
Data Table
Adjustment data at
, 2012:
,
a. Accrued service revenue at
One-fifth
of
the
prepaid
rent
expired
during
the month
b.
,
c. Supplies on hand at
d. Depreciation on automobile for the month,
for one day only. The
e. Accrued salary expense at
five-day weekly payroll is
.
More Info
hha08.p3.40b_sh.tdxex
hha08.p3.41b_sh.tdxex
The adjusted trial balance of
Piano Tuning Service at fiscal year end
(Click the icon to view adjusted trial balance.)
Requirement 1. Prepare
31, 2011, follows.
(Click the icon to view the requirements.)
2011 income statement.
Let's start with the preparation of the income statement. Begin with the header. Then complete the income statement by entering
the accounts, labels, and amounts and calculating net income.
Requirement 2. Prepare the statement of owner's equity for the year. (There were no owner's investments for the year. Complete
all answer boxes.)
hha08.p3.41b_sh.tdxex
Requirement 3. Prepare the year-end balance sheet.
Begin with the header. Then list the appropriate accounts and amounts. Label and total each section of the report.
hha08.p3.41b_sh.tdxex
Requirement 4. Which financial statement reports the company's results of operations?
Were the 2011 operations successful?
Requirement 5. Which statement reports the company's financial position?
hha08.p3.41b_sh.tdxex
Data Table
hha08.p3.41b_sh.tdxex
More Info
hha08.p3.41b_sh.tdxex
Requirements
Piano Tuning Service's 2011 income statement.
1. Prepare
2. Prepare the statement of owner's equity for the year.
3. Prepare the year-end balance sheet.
Piano Tuning
4. Which financial statement reports
Service's results of operations? Were the 2011 operations
successful? Cite specifics from the financial statements to support
your evaluation.
5. Which statement reports the company's financial position?
hha08.e3.42_sh.tdxex
The trial balance and the posted T-accounts that
(Click the icon to view the trial balance.)
Lawn Service prepared at
(Click the icon to view the posted T-accounts.)
Requirements
determines there are
in Lawn Supplies left at
1.
entries.
2. Post to the T-accounts, keying all items by date.
3. Prepare the adjusted trial balance.
Requirement 1.
journal entries.
determines there are
31 is as follows:
31, 2009. Journalize any required adjusting journal
in Lawn Supplies left at
31, 2009. Journalize any required adjusting
Start by journalizing the adjusting entry for the supplies account.
Next, journalize the adjusting entry to record depreciation through
31, 2009. (Round to the nearest dollar)
hha08.e3.42_sh.tdxex
Requirement 2. Post the adjustments that you journalize in requirement 1 to the T-accounts below, keying each item by date.
Compute the ending balance of each account and enter it on the appropriate side of each T-account. (Leave unused cells blank.)
hha08.e3.42_sh.tdxex
hha08.e3.42_sh.tdxex
Requirement 3. Prepare the adjusted trial balance by completing the "Preparation of Adjusted Trial Balance" work sheet.
Page 4 of 6
hha08.e3.42_sh.tdxex
Data Table
* Equipment was purchased on
3 and is expected to remain in service for four years.
Data Table
Page 5 of 6
hha08.e3.42_sh.tdxex
Page 6 of 6
hha08.e3a.1_sh.tdxex
At the beginning of the year, supplies of
more supplies. At the end of the year,
were on hand. During the year,
has
of supplies on hand.
Air Conditioning Service paid
for
Requirements
records supplies by initially debiting an asset account. Therefore, place the beginning balance in the
1. Assume that
Supplies T-account, and record the preceding entries directly in the accounts without using a journal.
records supplies by initially debiting an expense account. Therefore, place the beginning balance in
2. Assume that
the Supplies expense T-account, and record the preceding entries directly in the accounts without using a journal.
3. Compare the ending account balances under both approaches. Are they the same?
Requirement 1. Assume that
records supplies by initially debiting an asset account. Therefore, place the beginning
balance in the Supplies T-account, and record the preceding entries directly in the accounts without using a journal. (CP = Cash
Paid in the transaction list. Leave unused cells blank.)
Requirement 2. Assume that
records supplies by initially debiting an expense account. Therefore, place the beginning
balance in the Supplies expense T-account, and record the preceding entries directly in the accounts without using a journal. (CP
= Cash Paid in the transaction list. Leave unused cells blank.)
Requirement 3. Compare the ending account balances under both approaches. Are they the same?
hha08.e3a.1_sh.tdxex
hhfma02.e3a.2_sh.tdxex
At the beginning of the year,
Advertising owed customers
for unearned service revenue collected in advance. During
the year,
received advance cash receipts of
. At year-end, the liability for unearned revenue is
.
(Click the icon to view the requirements.)
Requirement 1. Assume that
records unearned revenues by initially crediting a liability account. Enter the beginning
balance in Unearned service revenue T-account. Journalize the cash collection and adjusting entries, and post their dollar
amounts in the T-accounts. As references in the T-accounts, denote a cash receipt by CR, and an adjustment by Adj.
Begin by entering the beginning balance in the Unearned service revenue T-account. (Leave unused cells blank.)
Journalize the cash collection.
Journalize the adjusting entry.
hhfma02.e3a.2_sh.tdxex
Now post the entries to the T-accounts and calculate the ending balance of the Unearned service revenue account. (Leave unused
cells blank.)
Requirement 2. Assume that
records unearned revenues by initially crediting a revenue account. Enter the beginning
balance in Service revenue. Journalize the cash collection and adjusting entries, and post their dollar amounts in the T-accounts.
As references in the T-accounts, denote a cash receipt by CR, and an adjustment by Adj.
Start by entering the beginning balance in Service revenue T-account. (Leave unused cells blank.)
Journalize the cash collection.
hhfma02.e3a.2_sh.tdxex
Journalize the adjusting entry.
Now post the entries to the T-accounts and calculate the ending balance of both accounts. (Leave unused cells blank.)
Requirement 3. Compare the ending account balances under both approaches. Are they the same?
hhfma02.e3a.2_sh.tdxex
More Info
Requirements
records unearned revenues by initially crediting a liability account.
1. Assume that
Enter the beginning balance in Unearned service revenue T-account. Journalize the
cash collection and adjusting entries, and post their dollar amounts in the T-accounts. As
references in the T-accounts, denote a cash receipt by CR, and an adjustment by Adj.
records unearned revenues by initially crediting a revenue account.
2. Assume that
Enter the beginning balance in Service revenue. Journalize the cash collection and
adjusting entries, and post their dollar amounts in the T-accounts. As references in the
T-accounts, denote a cash receipt by CR, and an adjustment by Adj.
3. Compare the ending balances in the two accounts.
hha08.p3a.3a_sh.tdxex
Pages Pack'n Mail completed the following transactions during 2010:
(Click the icon to view the transactions.)
Requirements
1. Journalize these entries by debiting an asset account for Prepaid rent and by crediting a liability account for Unearned
service revenue. Explanations are unnecessary.
2. Journalize the related adjustments at December 31, 2010.
3. Post the entries to the T-accounts, and show their balances at December 31, 2010. Posting references are unnecessary.
4. Repeat requirements 1 - 3. This time, debit Rent expense for the rent payment and credit Service revenue for the collection
of revenue in advance.
5. Compare the account balances in requirements 3 and 4. They should be equal.
Requirement 1. Journalize the November transaction by debiting an asset account for Prepaid rent.
Journalize the December transaction by crediting a liability account for Unearned service revenue.
hha08.p3a.3a_sh.tdxex
Requirement 2. Journalize the related adjustments at December 31, 2010. Begin by adjusting the Prepaid rent account.
Now adjust the Unearned service revenue account.
Requirement 3. Post the entries to the T-accounts and calculate an ending balance for each account. (Use the first available cell
on each debit or credit side.)
Requirement 4. Journalize the November transaction by debiting Rent expense for the rent payment.
hha08.p3a.3a_sh.tdxex
Journalize the December transaction by crediting Service revenue for the collection of revenue in advance.
Journalize the related adjustments at December 31, 2010. Begin by adjusting the Prepaid rent account.
Now adjust the Unearned service revenue account.
hha08.p3a.3a_sh.tdxex
Post the entries to the T-accounts and calculate an ending balance for each account. (Use the first available cell on each debit or
credit side.)
Requirement 5. Compare the account balances in requirements 3 and 4.
Data Table
hha08.p3a.4b_sh.tdxex
Pages Pack'n Mail completed the following transactions during 2010:
(Click the icon to view the transactions.)
Requirements
1. Journalize these entries by debiting an asset account for Prepaid rent and by crediting a liability account for Unearned
service revenue. Explanations are unnecessary.
2. Journalize the related adjustments at December 31, 2010.
3. Post the entries to the T-accounts, and show their balances at December 31, 2010. Posting references are unnecessary.
4. Repeat requirements 1 - 3. This time, debit Rent expense for the rent payment and credit Service revenue for the collection
of revenue in advance.
5. Compare the account balances in requirements 3 and 4. They should be equal.
Requirement 1. Journalize the November transaction by debiting an asset account for Prepaid rent.
Journalize the December transaction by crediting a liability account for Unearned service revenue.
hha08.p3a.4b_sh.tdxex
Requirement 2. Journalize the related adjustments at December 31, 2010. Begin by adjusting the Prepaid rent account.
Now adjust the Unearned service revenue account.
Requirement 3. Post the entries to the T-accounts and calculate an ending balance for each account. (Use the first available cell
on each debit or credit side.)
Requirement 4. Journalize the November transaction by debiting Rent expense for the rent payment.
hha08.p3a.4b_sh.tdxex
Journalize the December transaction by crediting Service revenue for the collection of revenue in advance.
Journalize the related adjustments at December 31, 2010. Begin by adjusting the Prepaid rent account.
Now adjust the Unearned service revenue account.
hha08.p3a.4b_sh.tdxex
Post the entries to the T-accounts and calculate an ending balance for each account. (Use the first available cell on each debit or
credit side.)
Requirement 5. Compare the account balances in requirements 3 and 4.
Data Table