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HW Assignments Ch$-04$

Question $2$ of $11-$ HW Assignments Ch$-04$

LO $1$: Accrual$-$Basis Accounting and A

Assignments Ch$-04$

Question $2$ of $11$

$-15$

Larkspur, Inc. has the following information available for accruals for the year ended December $31,2022.$ The company adjusts its accounts annually.

The December utility bill for $$628$ was unrecorded on December $31.$ Larkspur paid the bill on January $11.$

Larkspur is open $7$ days a week and employees are paid a total of $$5,040$ every Monday for a $7-$day $($Monday$-$Sunday$)$ workweek. December $31$ is a Thursday, so employees will have worked $4$ days $($Monday$,$ December $28-$Thursday, December $31)$ that they have not been paid for by year$-$end. Employees will be paid next on January $4.$

Larkspur signed a $$64,800,5\%$ bank loan on November $1,2021,$ due in $2$ years. Interest is payable on the first day of each following month $($For example, interest incurred during November is paid on December $1.).$

Larkspur receives a fee from Pizza Shop next door for all pizzas sold to customers using Larkspur's facility. The amount owed for December is $$432,$ which Pizza Shop will pay on January $4.($Hint: Use the Service Revenue account.$)$

Larkspur rented some of its unused warehouse space to a client for $$8,640$ a month, payable the first day of the following month. It received the rent for the month of December on January $2.$

$($a$)$

For each situation, record the adjustment required at December $31$ using the tabular summary that follows. $($Round all calculations to the nearest dollar. If a transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign $($or parentheses$)$ in front of the amount entered for the particular Asset, Liability or Equity item that was reduced.$)$

Assets

$=$

Liabilit