Chapter 8 End-of-Period and Other Activity (Merchandising Company) You review the account balances and make additional adjusting journal entries for February (dated 2/29) as needed, carefully considering the following: Your last loan payment to Martin's parents was made on 2/27 and covered interest through 2/29. Martin borrowed the $2,500 from the bank on 2/28. You don't worry about accruing inter- est for one day. You review your revenue and unearned revenue accounts to make sure all carned revenue and only earned revenue) is recognized. All the income billed in February was earned in February so you don't need to defer any revenue. For Unearned revenue, you review the entries made in January. The unearned revenue for Annie Wang at the end of January was for sessions held in February. The unearned revenue for Teacher's College was for a workshop held in February. You make the ap- propriate entry to properly recognize any February revenue. You make adjusting journal entries, dated 2/29, for other current assets, depreciation, and other current liabilities, as needed. TIP: For depreciation, you will need to add depreciation for the shelving placed in service on 2/1. The cost was $649. You think the shelving will have a $49 salvage value. You depreciate it over the lease term (24 months). Don't forget to depreciate all the fixed assets purchased in prior months. The depreciation amount for those items will be the same as the entry in January. TIP: Look at all the current asset and liability accounts on the balance sheet. Should any of them be adjusted? Look at the profit and loss statement. Are there expenses re- corded that shouldn't be recognized in February? Are there expenses that should have C been recorded but haven't been? It's often very helpful to be able to compare months when doing month-end work. Consider customizing the profit and loss report by changing the dates to 1/1 to 2/29 and selecting Months in the Display columns by dropdown menu. You realize you forgot to pay yourself for work done in February. You create an account called "Accrued Expenses" (Account #221) and record the $300 due you for your account- ing work. (TIP: Use other current liabilities as the detail type.) You review your chart of accounts. You aren't using the Exam Proctoring account Account #410) so you delete the account (make it inactive). You decide to move the $950 paid to Les & Schmidt for the marketing study out of Accoun iner and consulting fees and into a new Marketing expenses account. You use account #632. Chapter 8 End-of-Period and Other Activity (Merchandising Company) You review the account balances and make additional adjusting journal entries for February (dated 2/29) as needed, carefully considering the following: Your last loan payment to Martin's parents was made on 2/27 and covered interest through 2/29. Martin borrowed the $2,500 from the bank on 2/28. You don't worry about accruing inter- est for one day. You review your revenue and unearned revenue accounts to make sure all carned revenue and only earned revenue) is recognized. All the income billed in February was earned in February so you don't need to defer any revenue. For Unearned revenue, you review the entries made in January. The unearned revenue for Annie Wang at the end of January was for sessions held in February. The unearned revenue for Teacher's College was for a workshop held in February. You make the ap- propriate entry to properly recognize any February revenue. You make adjusting journal entries, dated 2/29, for other current assets, depreciation, and other current liabilities, as needed. TIP: For depreciation, you will need to add depreciation for the shelving placed in service on 2/1. The cost was $649. You think the shelving will have a $49 salvage value. You depreciate it over the lease term (24 months). Don't forget to depreciate all the fixed assets purchased in prior months. The depreciation amount for those items will be the same as the entry in January. TIP: Look at all the current asset and liability accounts on the balance sheet. Should any of them be adjusted? Look at the profit and loss statement. Are there expenses re- corded that shouldn't be recognized in February? Are there expenses that should have C been recorded but haven't been? It's often very helpful to be able to compare months when doing month-end work. Consider customizing the profit and loss report by changing the dates to 1/1 to 2/29 and selecting Months in the Display columns by dropdown menu. You realize you forgot to pay yourself for work done in February. You create an account called "Accrued Expenses" (Account #221) and record the $300 due you for your account- ing work. (TIP: Use other current liabilities as the detail type.) You review your chart of accounts. You aren't using the Exam Proctoring account Account #410) so you delete the account (make it inactive). You decide to move the $950 paid to Les & Schmidt for the marketing study out of Accoun iner and consulting fees and into a new Marketing expenses account. You use account #632
