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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
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 calculationsStep by Step Solution
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