Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 2, Problem 2.7BE
• LO2–5
Prepare the necessary adjusting entries at its year-end of December 31, 2018, for the Jamesway Corporation for each of the following situations. No adjusting entries were recorded during the year.
1. On December 20, 2018, Jamesway received a $4,000 payment from a customer for services to be rendered early in 2019. Service revenue was credited.
2. On December 1, 2018, the company paid a local radio station $2,000 for 40 radio ads that were to be aired, 20 per month, throughout December and January. Prepaid advertising was debited.
3. Employee salaries for the month of December totaling $16,000 will be paid on January 7, 2019.
4. On August 31, 2018, Jamesway borrowed $60,000 from a local bank. A note was signed with principal and 8% interest to be paid on August 31, 2019.
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Number of Days Unpaid
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31-60 days past due
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$128,400
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Required:
a. The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit
balance in the amount of $29,517 on July 31, 2019. Prepare the required adjusting entry to record Bad
Debt Expense for the year.
b. Johnston Supplies, Inc. writes off $3,271 of uncollectible accounts on August 15, 2019. Prepare the
required adjusting entry to record the write-off.
c. Use a T-account to determine the account balance in the Allowance for Doubtful Accounts on August 15,
2019.
Complete this question by entering your answers in the tabs below.
Required A
Required B
Required C
The unadjusted balance of the Allowance for Doubtful Accounts of Johnston Supplies, Inc. is a credit balance in the amount of $29,517
on July 31, 2019. Prepare the required adjusting entry to record Bad Debt Expense for…
Problem 10-22 (AICPA Adapted)
Black Company reported accounta payable on December 1
2021 at P4,600,000 before any necessary yoar-end adjustment
rolating to the following transactions:
On December 27, 2021, Black Company wrote and recorded
checks to creditors totaling P2,000,000 causing an overdrat
of P500,000 in Black Company's bank account on December
31, 2021. The checks were mniled out on January 10, 2022
On December 28, 2021, Black Company purchaied and
received goods for P750,000 terms 2/10, n /30.
Black Company, records purchases and accounts payable at
net amount. The invoice was recorded and paid January 5,
2022
Goods shipped FOB destination, 5/10, n/30 on December
20, 2021 from a vendor to Black Company were received
January 15, 2022. The invoice cost was P325,000.
On December 31, 2021, what amount should be reported as
accounts payable?
a. 7,575,000
b. 7,250,000
c. 7.235,000
d. 7,553,500
Correction of errorsIn examining the books of Mulan Company, you found out that certain adjustments had been overlooked at the end of 2019 and 2020. You also discovered that other items had been improperly recorded. These omissions and other failures for each year are summarized below:
12/31/20 12/31/19Salaries payable P780,000 P873,600Interest receivable 213,000 259,200Prepaid insurance 307,800 384,000Advances from customers (Collections from customers had beenrecorded as sales but should have been recognized as advances from customers because goods were not shipped until the following year) 561,000 470,400
Machinery (Capital expenditures had been recorded as repairs but shouldhave been charged to Machinery; the depreciation rate is 10% per year, but depreciation in the year of expenditure is to be recognized at 5%) 522,000 564,000
Required:Compute for the total effect of errors in the net income of 2019 and 2020.
Chapter 2 Solutions
Intermediate Accounting
Ch. 2 - Explain the difference between external events and...Ch. 2 - Each economic event or transaction will have a...Ch. 2 - What is the purpose of a journal? What is the...Ch. 2 - Explain the difference between permanent accounts...Ch. 2 - Describe how debits and credits affect assets,...Ch. 2 - Describe how debits and credits affect temporary...Ch. 2 - What is the first step in the accounting...Ch. 2 - Prob. 2.8QCh. 2 - Prob. 2.9QCh. 2 - Prob. 2.10Q
Ch. 2 - What is an unadjusted trial balance? An adjusted...Ch. 2 - Define adjusting entries and discuss their...Ch. 2 - Define closing entries and their purpose.Ch. 2 - Define prepaid expenses and provide at least two...Ch. 2 - Deferred revenues represent liabilities recorded...Ch. 2 - Define accrued liabilities. What adjusting journal...Ch. 2 - Prob. 2.17QCh. 2 - [Based on Appendix A] What is the purpose of a...Ch. 2 - [Based on Appendix B] Define reversing entries and...Ch. 2 - [Based on Appendix C] What is the purpose of...Ch. 2 - Prob. 2.21QCh. 2 - Transaction analysis LO21 The Marchetti Soup...Ch. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Prob. 2.3BECh. 2 - Journal entries LO22 Prepare journal entries for...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; income determination LO24,...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Income determination LO24 If none of the...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Financial statements LO26 The following account...Ch. 2 - Closing entries LO27 The year-end adjusted trial...Ch. 2 - Prob. 2.13BECh. 2 - Transaction analysis LO21 The following...Ch. 2 - Journal entries LO22 Prepare journal entries to...Ch. 2 - T-accounts and trial balance LO23 Post the...Ch. 2 - Journal entries LO22 The following transactions...Ch. 2 - Prob. 2.5ECh. 2 - Debits and credits LO22 Indicate whether a debit...Ch. 2 - Transaction analysis; debits and credits LO22...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries LO25 Prepare the necessary...Ch. 2 - Adjusting entries; solving for unknowns LO24,...Ch. 2 - Adjusting entries LO25 The Mazzanti Wholesale...Ch. 2 - Financial statements and closing entries LO26,...Ch. 2 - Closing entries LO27 American Chip Corporations...Ch. 2 - Prob. 2.14ECh. 2 - Cash versus accrual accounting; adjusting entries ...Ch. 2 - External transactions and adjusting entries LO22,...Ch. 2 - Accrual accounting income determination LO24,...Ch. 2 - Cash versus accrual accounting LO28 Stanley and...Ch. 2 - Prob. 2.19ECh. 2 - Worksheet Appendix 2A The December 31, 2018,...Ch. 2 - Reversing entries Appendix 2B The employees of...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Reversing entries Appendix 2B Refer to E 29 and...Ch. 2 - Special journals Appendix 2C The White Companys...Ch. 2 - Prob. 2.25ECh. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Accounting cycle through unadjusted trial balance ...Ch. 2 - Adjusting entries LO25 Pastina Company sells...Ch. 2 - Accounting cycle; adjusting entries through...Ch. 2 - Adjusting entries LO25 Howarth Companys fiscal...Ch. 2 - Accounting cycle LO22 through LO27 The general...Ch. 2 - Adjusting entries and income effects LO22, LO25...Ch. 2 - Adjusting entries LO25 Excalibur Corporation...Ch. 2 - Accounting cycle; unadjusted trial balance through...Ch. 2 - Prob. 2.10PCh. 2 - Prob. 2.11PCh. 2 - Cash versus accrual accounting LO28 Zambrano...Ch. 2 - Worksheet Appendix 2A Using the information from...Ch. 2 - Judgment Case 21 Cash versus accrual accounting;...Ch. 2 - Prob. 2.2BYPCh. 2 - Communication Case 23 Adjusting entries LO24 I...Ch. 2 - Continuing Cases Target Case LO24, LO28 Target...
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