Accounting 255

Accrual Accounting Case Instructions

Pathfinder Company's 12-31-2100 working trial balance is presented in the "WTB" Worksheet next to this one. Make adjustments to convert the WTB from the cash basis to accrual accounting based on the concepts you have learned in Accounting 250 and the following additional information. Journal entries should reference the item numbers below e.g. ADJ#1. Round all adjustments to the nearest whole number, for example 249.50 should be 250 and do not enter cents. Only one journal entry may be entered in one cell. Therefore only one debit and one credit entry can be made for each row: the debit in column D, the credit in column F, and the reference in column E. Do not cut and paste cell contents and do not enter cell references or formulas into the cells. Submit your completed file using the link provided in the Week 1 folder of the Course Materials area. Make a backup copy for yourself. Do not change the file name.'

1. An additional $3,700 of fees were earned but not recorded at December 31. No cash has been received. 2. The prepaid insurance policy covers the building and automobiles for three years. It was taken out and paid for on January 1, 2100. 3. The automobiles were purchased at the beginning of the year and have an estimated life of 3 years with no salvage value. The straight line depreciation method is used. 4. The buildings have a 20 year life and were purchased at the beginning of the year. Their salvage value has been estimated at $50,000. Its market value at the end of the year was $480,000. 5.The note payable was taken out on July 31, 2100 bearing interest of 12% per year. No payments have been made. 6.Two days of worker salaries have been earned but not yet recorded or paid. The amount of the unpaid salaries is $1,200. 7. Maintenance on the automobiles was performed by Sandel's Service Inc. during December. The invoice for $1,700 was received on January 3 of the next year and has not yet been recorded or paid. 8. $200 of office supplies were on hand at the end of the year. 9. While the internal auditor was reconciling the bank it was discovered that a wire transfer for $3,000 was deposited into Pathfinder Company's bank account on December 31 by one of Pathfinder Company's customers. It was an advance payment for work to be performed during the next year and has not yet been recorded on Pathfinder's books. 10. It has been determined that one customer would not be able to pay his account receivable balance of $235. 11. The treasurer has reviewed the accounts receivable balances from their customers and determined that the balance of the Allowance for Doubtful Accounts should be equal to $800. 12. One of Pathfinder's stockholders purchased an additional 100 shares of stock for par. The book keeper correctly debited cash but erroneously credited Fee Revenue for $500 to record this transaction.