At the end of December 31, 2016, $22,650 of fees have been earned but have not been billed to clients. Please propose the adjusted journal entry. (5 points)

Date

Account Name

Debit

Credit

The prepaid insurance account had a beginning balance on Jan 1, 2016 is $9,600 and was debited for $12,900 of premiums paid during the year. Journalize the adjusting entry required at the end of the year on Dec 31, 2016, assuming the amount of unexpired insurance related to future periods is $7,360. (5 points)

Date

Account Name

Debit

Credit

On June 1, 2016, Herbal Co. received $18,900 for the rent of land for 12 months. Journalize the adjusting entry required for unearned rent on December 31, 2016. (5 points)

Date

Account Name

Debit

Credit

BANK RECONCILIATION

ABC company has bank balance on Dec 31, 2016 is $37,140, and the book balance at the year-end is $32,500. The other information are as followings:

Checks outstanding totaled $3,620.00

A deposit of $4,496.00 had been made too late to appear on the bank statement. A check written by AJK Co. (cashed) for $1,233 had been incorrectly recorded by the company as $233. The bank collected $4,541.00 on a note left for collection. (No interest was included in payment by the customer.) Bank service charges for December is $25.

Q1: Please work on bank reconciliation for the year end of 2016 below (12 points):

ABC Company

Bank Reconciliation

December 31, 2016

Cash balance 12/31/16 per book: $32,500

Cash balance 12/31/16 per bank: $37,140

Add:

Add:

Subtract:

Subtract

Adjusted cash balance per book:

Adjusted cash balance per bank:

Q2: Adjusted journal entries to bank reconciliation (10 points)

Ref No.

Account Name

Debit

Credit

Q3: What is your cash balance reported to the financial statement? (3 points)

CALCULATION- FIFO vs. LIFO (20 points)

1. Roo Inc. maintains a perpetual inventory system. Calculate the cost of merchandise sold for the month AND the value of the ending inventory using the LIFO and FIFO (20 points)

3-Mar

Inventory

12 t-shirts

$15

11-Mar

Purchase

13 t-shirts

$17

14-Mar

Sale

18 t-shirts

21-Mar

Purchase

9 t-shirts

$20

26-Mar

Sale

10 t-shirts

First In First Out (FIFO) Late In First Out (LIFO)

Cost of merchandise sold Cost of merchandise sold

Value of ending inventory Value of ending inventory