5. Wages Payable Soletsky, Inc. employs 40 workers in its plant. Each employee is paid $10 per hour and works seven hours per day, Monday through Friday. Employees are paid every Friday. The last payday was Friday, September 19. Required: 1. Compute the dollar amount of the weekly payroll. $ _________________ per week 2. Identify and analyze the transaction on Friday, September 26, for the payment of the weekly payroll. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 3. Denton prepares monthly financial statements. Identify and analyze the adjustment on Tuesday, September 30, the last day of the month. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 4. Identify and analyze the transaction on Friday, October 3, for the payment of the weekly payroll. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 5. Will net income for the month of September be understated or overstated if Soletsky doesnt bother with an adjustment on September 30? _________________ 6. eBook Interest Receivable On June 1, 2014, MicroTel Enterprises lends $60,000 to MaxiDriver Inc. The loan will be repaid in 60 days with interest at 10%. Assume a 360-day year. Required: 1. Identify and analyze the transaction on MicroTels books on June 1, 2014. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 2. Identify and analyze the adjustment on MicroTels books on June 30, 2014. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 3. Identify and analyze the adjustment on MicroTels books on July 31, 2014, when MaxiDriver repays the principal and interest. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Do not round intermediate calculations. If required, round your final answer to the nearest dollar. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 7. eBook Use of Account Balances as a Basis for Adjustments Bob Reynolds operates a real estate business. A list of accounts on April 30, 2014, before any adjustments are recorded, appears as follows: Required: 1. For each of the items of other data (a) through (h) provided below, identify and analyze adjustment necessary on April 30, 2014. Do not round intermediate calculations. If required, round your final answers to the nearest dollar. a. The monthly insurance cost is $50. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ b. Office supplies on hand on April 30, 2014, amount to $180. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ c. The office equipment was purchased on April 1, 2013. On that date, it had an estimated useful life of ten years. Use straight line method of depreciation. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ d. On September 1, 2013, the automobile was purchased; it had an estimated useful life of five years. Use straight line method of depreciation. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra account is increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ e. A deposit is received in advance of providing any services for first-time customers. Amounts received in advance are recorded initially in the account Unearned Commissions. Based on services provided to these first-time customers, the balance in this account at the end of April should be $5,000. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ f. Repeat customers are allowed to pay for services one month after the date of the sale of their property. Services rendered during the month but not yet collected or billed to these customers amount to $1,500. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ g. Interest owed on the note payable but not yet paid amounts to $20. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ h. Salaries owed but unpaid to employees at the end of the month amount to $2,500. Activity _________________ Accounts _________________ Statement(s) _________________ How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity Revenues Expenses = Net Income _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ _________________ 2. Compute the net increase or decrease in net income for the month from the recognition of the adjustments in (1). (Ignore income taxes.) _________________ of $ _________________