E3-19A. (Learning Objectives 1, 3: Explain how accrual accounting differs from cash-basisaccounting; adjust the accounts) An accountant made the following adjustments atDecember 31, the end of the accounting period:a. Prepaid insurance, beginning, $500. Payments for insurance during the period, $2,000.Prepaid insurance, ending, $400.b. Interest revenue accrued, $2,500.c. Unearned service revenue, beginning, $1,700. Unearned service revenue, ending, $300.d. Depreciation on building, $5,600.e. Employees’ salaries owed for two days of a five-day work week; weekly payroll, $19,000.f. Income before income tax, $21,000. Income tax rate is 35%.Requirements1. Journalize the adjusting entries.2. Suppose the adjustments were not made. Calculate the overall overstatement or understatement of net income resulting from the omission of these adjustments.

E3-19A. (Learning Objectives 1, 3: Explain how accrual accounting differs from cash-basisaccounting; adjust the accounts) An accountant made the following adjustments atDecember 31, the end of the accounting period:a. Prepaid insurance, beginning, $500. Payments for insurance during the period, $2,000.Prepaid insurance, ending, $400.b. Interest revenue accrued, $2,500.c. Unearned service revenue, beginning, $1,700. Unearned service revenue, ending, $300.d. Depreciation on building, $5,600.e. Employees’ salaries owed for two days of a five-day work week; weekly payroll, $19,000.f. Income before income tax, $21,000. Income tax rate is 35%.Requirements1. Journalize the adjusting entries.2. Suppose the adjustments were not made. Calculate the overall overstatement or understatement of net income resulting from the omission of these adjustments.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter4: Accounting For Retail Operations

Section: Chapter Questions

Problem 4.7E: Determining amounts to be paid on invoices Determine the amount to be paid in full settlement of...

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E3-31B. (Learning Objectives 2, 3: Apply the revenue and expense recognition principles;adjust the accounts) Englewood Corporation experienced four situations for its supplies.Calculate the amounts that have been left blank for each situation. For situations 1 and 2,journalize the needed transaction. Consider each situation separately.Beginning supplies.....................................Purchases of supplies during the year........Total amount to account for.....................Ending supplies.........................................Supplies Expense .......................................3$ 700??(700)$ 1,3001$1,500?2,900(990)$1,910$ 700400?(900)$ ?2$ 1,0008001,800?$ 1,600Situation 4E3-32B. (Learning Objective 3: Adjust the accounts) Thornton Company faced the following situations. Journalize the adjusting entry needed at December 31, 2020, for each situation.Consider each fact separately.a. The business has interest expense of $3,800 that it must pay early in January 2021.b. Interest…
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