Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

adjusting entries On December 31, 2013, the bookkeeper of Atomic Company prepared a statement of income and a balance sheet. The statement of income showed

image text in transcribed

adjusting entries

On December 31, 2013, the bookkeeper of Atomic Company prepared a statement of income and a balance sheet. The statement of income showed net income of $60,000 while the balance sheet reflected total assets of $320,000, total liabilities of $80,000, and shareholders equity of $240,000. The controller of the company realized that the statements were incorrect as the bookkeeper had not prepared adjusting journal entries relating to the following information: 1. Wages amounting to $47,000 for the last 4 days of December 2013 had not been paid nor recorded. 2. An amount of $9,200 was received from a customer on December 1, 2013 for the lease of equipment for the period December 1, 2013 to January 15, 2014. The full amount was credited to Unearned Revenue. 3 Amortization for the year on equipment that cost $150,000 was not recorded. The equipment was purchased on November 30, 2012, had an estimated useful life of 8 years and a residual value of $30,000. 4. On September 30, 2013, Atomic paid $18,000 for a three-year insurance policy. The entire amount was recorded as insurance expense. Insurance coverage started on July 1, 2013. 5. Rent expense on the trial balance was $81,000 while the prepaid rent account showed $27,000. The $27,000 represents the cheque sent to Atomic Company's landlord dated November 15, 2013 for December, January and February's rent. 6. An unrecorded invoice totalling $1,150 was located for supplies which were received on December 24 and remain on hand at December 31, 2013 Required: a. Prepare, in good format, the adjusting journal entries for the year ended December 31, 2013. Explanations are not required; please provide any supporting calculations

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp

6th Edition

0324303254, 9780324303254

More Books

Students also viewed these Accounting questions

Question

In your opinion, how will HR change in the future? Why?

Answered: 1 week ago