mckenziebeach5ox9oy3
15.10.2020 •
Business
For each of the following separate cases, prepare adjusting entries required of financial statements for the year ended (date of) December 31, 2017.
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 $11,560. The Office Supplies account had a $490 debit balance at the beginning of the year. During the year, $6,444 of office supplies are purchased. A physical count of supplies at December 31 shows $694 of supplies available.
c. The Prepaid Insurance account had a $5,000 balance at the beginning of the year. An analysis of insurance policies shows that $2,400 of unexpired insurance benefits remain at December 31.
d. The company has earned (but not recorded) $1,000 of interest revenue for the year ended December 31. The interest payment will be received 10 days after the year-end on January 10.
e. The company has a bank loan and has incurred (but not recorded) interest expense of $3,500 for the year ended December 31. The company will pay the interest five days after the year-end on January 5.
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Ответ:
Date: 31 December, 2017
a.
Wages Expense 6000 Dr
Wages Payable 6000 Cr
b.
Depreciation expense 11560 Dr
Accumulated depreciation 11560 Cr
Office supplies expense 6240 Dr
Office supplies 6240 Cr
c.
Insurance expense 2600 Dr
Prepaid Insurance 2600 Cr
d.
Interest Receivable 1000 Dr
Interest Revenue 1000 Cr
e.
Interest expense 3500 Dr
Interest Payable 3500 Cr
Explanation:
a.
The wages expense should be recorded as wages relate to this year. As they are not paid, a liability of wages payable should be credited.
b.
The depreciation expense for the year is recorded and a credit to accumulated depreciation is made.
The office supplies expense should be calculated by taking the office supplies at the start of the year and adding the purchases and deducting the closing inventory.
Supplies expense = 490 + 6444 - 694 = 6240
c.
The prepaid insurance is an asset and the difference between the opening and closing balance of prepaid insurance is the expense for the year that is 5000 - 2400 = 2600
d.
The interest revenue relates to this year and should be recorded as credit to interest revenue and a debit to an asset of interest receivable.
e.
The interest expense relates to this year and should be recorded as interest expense debit and interest payable which is a liability as a credit.
Ответ:
Supporters of the progressive system claim that higher salaries enable affluent people to pay higher taxes and that this is the fairest system because it lessens the tax burden of the poor. ... Taxes do not discourage high earners from earning more, and the low tax rate encourages the poor to strive to earn more.
Explanation: