Sigma Investments Ltd is a property investment company. They are now in the process of preparing the financial statements for the year ended 30 June 2021. The accountant has identified the following necessary year-end adjustments: (a) Estimated depreciation on office equipment for the year, $4,000. (b) The Prepaid Insurance account has a $2,400 debit balance before adjustment. An examination of insurance policies shows $600 of unexpired insurance. (c) The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has not paid his rent for June 2021. (d) The company has obtained a bank loan for $60,000 at the interest rate of 8% per annum. The interest for June 2021 is still unrecorded. (e) The Office Supplies account has a balance of $990. The unused supplies available in the inventory amounts to $210 on 30 June 2021. Required: Prepare adjusting jour

Sigma Investments Ltd is a property investment company. They are now in the process of preparing the financial statements for the year ended 30 June 2021. The accountant has identified the following necessary year-end adjustments: (a) Estimated depreciation on office equipment for the year, $4,000. (b) The Prepaid Insurance account has a $2,400 debit balance before adjustment. An examination of insurance policies shows $600 of unexpired insurance. (c) The company collects rent monthly from its tenants. One tenant whose rent is $750 per month has not paid his rent for June 2021. (d) The company has obtained a bank loan for $60,000 at the interest rate of 8% per annum. The interest for June 2021 is still unrecorded. (e) The Office Supplies account has a balance of $990. The unused supplies available in the inventory amounts to $210 on 30 June 2021. Required: Prepare adjusting jour

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 18P: Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett...

See similar textbooks

Similar questions

On November 30, 2019, Davis Company and the following account balances: 1. Prepare general journal entries to record preceding transactions. 2. Post to general ledger T-accou11ts. 3. Prepare a year-end trial balance on a worksheet and complete the worksheet using the following information: (a) accrued salaries at year-end total $1,200; (b ) for simplicity, the building and equipment are being depreciated using the stright-line method over an estimated life of 20 years with no residual all c) supplies on hand at the end of the year total $630; (d ) bad debts expense for the year totals $830; and (e ) the income tax rate is 30%; income taxes are payable in the first quarter of 2020. 4. Prepare company's financial statements for 2019 . 5. Prepare 2019 (a) adjusting and (b) closing entries in the general journal.
Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett Trucking Company, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2016 to 2019, inclusive. The following data were in the Trucks account as of January 1, 2016: The Accumulated DepreciationTrucks account, previously adjusted to January 1,2016, and duly entered in the ledger, had a balance on that date of 16,460. This amount represented the straight-line depreciation on the four trucks from the respective dates of purchase, based on a 5-year life and no residual value. No debits had been made to this account prior to January 1, 2016. Transactions between January 1,2017, and December 31, 2019, and their record in the ledger were as follows: 1. July 1, 2016: Truck no. 1 was sold for 1,000 cash. The entry was a debit to Cash and a credit to Trucks, 1,000. 2. January 1, 2017: Truck no. 3 was traded for a larger one (no. 5) with a 5-year life. The agreed purchase price was 12,000. Jarrett paid the other company 1,780 cash on the transaction. The entry was a debit to Trucks, 1,780, and a credit to Cash, 1,780. 3. July 1, 2018: Truck no. 4 was damaged in a wreck to such an extent that it was sold as junk for 50 cash. Jarrett received 950 from the insurance company. The entry made by the bookkeeper was a debit to Cash, 1,000, and credits to Miscellaneous Revenue, 50, and Trucks, 950, 4. July 1, 2018: A new truck (no. 6) was acquired for 20,000 cash and debited at that amount to the Trucks account. The truck has a 5-year life. Entries for depreciation had been made at the close of each year as follows: 2016, 8,840; 2017, 5,436; 2018, 4,896; 2019, 4,356. Required: 1. Next Level For each of the 4 years, calculate separately the increase or decrease in earnings arising from the companys errors in determining or entering depreciation or in recording transactions affecting trucks. 2. Prove your work by one compound journal entry as of December 31, 2019; the adjustment of the Trucks account is to reflect the correct balances, assuming that the books have not been closed for 2019.
Accounting Two fixed assets are purchased during 2021: a copier for $10,987.65 on September 30, 2021 and an office desk for 5,432.10 on December 31, 2021. Depreciation entries are recorded at the end of each month. What will be general journal adjusting entry on December 31, 2021 for the depreciation of these fixed assets, if tax basis 150% MACRS is used?
Euphoria Company had a balance of P820,000 in the professional fees expense account on December 31, 2020, before considering year-end adjustments relating to the following:➢ Consultants were hired for a special project at a total fee not to exceed P650,000. The entity had recorded P550,000 of these fees based on building for work performed in 2020.➢ The attorney’s letter requested by the auditor dated Jan. 31, 2021, indicated that legal fees of P60,000 were billed on Jan. 15, 2021 for worked performed in Nov. 2020, and the unbilled fees for Dec. 31, 2020 were P70,000.What amount should be reported as professional fees expense for the year ended December 31, 2020?
The following selected transactions relate to liabilities of Interstate Farm Implements for December 2018. Interstate’s fiscal year ends on December 31.Required:Prepare the appropriate journal entries for these transactions.1. On December 15, received $7,500 from Bradley Farms toward the purchase of a $98,000 tractor to be delivered on January 6, 2019.2. During December, received $25,500 of refundable deposits relating to containers used to transport equipment parts.3. During December, credit sales totaled $800,000. The state sales tax rate is 5% and the local sales tax rate is2%. (This is a summary journal entry for the many individual sales transactions for the period).
The following information is available for the first three years of operations for Swift Company: (file attached) Requirements : 1. Prepare a schedule comparing depreciation for financial reporting and tax purposes 2. Determine the deferred tax (asset) or liability at the end of 2018 3. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019
On June 7,2019, Dilby Mechanical Corp completed $50,00 of servicing work for a client and billed them for that amount plus a GST of $2,500 and PST of $3,50; terms are N20. Required: a. Prepare the journal entry as it would appear in Dilby's accounting records. b. Assume the receivable established on June 7 was collected on June 27. Record the entry.
Jasper Incorporated prepares its financial statements according to International Financial Reporting Standards. At the end of its fiscal year, the company chooses to revalue its equipment. The equipment cost $810,000, had accumulated depreciation of $360,000 at the end of the year after recording annual depreciation, and had a fair value of $495,000. After the revaluation, the equipment account will have a balance of:
Beaver Construction purchases new equipment for $42,480 cash on April 1, 2021. At the time of purchase, the equipment is expected to be used in operations for six years (72 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 72 months ($590/month). 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2021 is $0). Accumulated Depreciation ending balance: _____________ Depreciation Expense ending balance:__________________
You were engaged to audit the books of accounts of A. Bonifacio contractors which had a 3 year construction contract in 2020 for Php 900,000. A Bonifacio uses the percentage of completion method for financial statement purposes. Income to be recognized each year is based on the ratio of cost incurred to total estimated cost to complete the contract. Data on this contract follows: Accounts receivable construction contract billings Php 30,000 Construction in progress 93,750 Less: Amounts billed 84,375 10% retention Php 9,375 Net Income recognized in 2020 (before tax) Php 15,000 A. Bonifacio contractors maintains a separate bank account for each construction contract. Bank deposits to this contract amounted to Php 50,000 Required: 6. How much cash was collected on the contract that was not yet deposited as at December 31, 2020? Thank you
Rahman Company, a manufacturer of steel products, began operations on January 1, 2020. Rahman has a December 31 fiscal year-end and adjusts its accounts annually. Selected transactions related to its Brampton plant are as follows: Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. Dec. 31, 2021 Recorded depreciation at year end. Jan. 1, 2022 One (1) stamping machine was sold for $1,250. . Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000.…
The following selected transactions relate to liabilities of Chicago Glass Corporation for 2024. Chicago's fiscal year ends on December 31. On January 15, Chicago received $7,400 from Henry Construction toward the purchase of $70,000 of plate glass to be delivered on February 6. On February 3, Chicago received $7,100 of refundable deposits relating to containers used to transport glass components. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price. First quarter credit sales totaled $740,000. The state sales tax rate is 4% and the local sales tax rate is 2%. Required: Prepare journal entries for the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.