Ex. 8

A review of the ledger of Nationwide Insurance LLC at December 31, 2016, produces the following data pertaining to the preparation of initial and adjusting entries:

(a)Received Cash upon signing a Notes Payable of $200,000. This is a 9-month note, dated September 1, 2014, with a 9% interest rate.

(b)Prepaid $540,000 for office rentals. During 2016, it signed 10 leases as shown below:

TermMonthlyNumber of

Date(in months)RentLeases

July 112$ 4,50010

(c)Received $75,000 in advance on customer contracts. During 2016, the company entered into 5 monthly service contracts with clients. The clients prepaid for the services to be provided over the contract period in an even manner.

Service PeriodAmountNumber of

Date(in months)Per ContractContracts

Nov 16$ 15,0005

Instructions:

1) Prepare the entry for the initial transaction when the note was signed, the rent was prepaid and the customer contract was paid in advance.

2) Prepare the adjusting entries at December 31, 2016. Show all computations.

Ex. 9

Prepare year-end adjustments at December 31, 2016 for the following transactions. Make each adjustment using the proper journal entry form indicating Debit/Credit, accounts and the amount.Dates and explanations can be omitted.

1.$10,000 of services have been performed for a client who paid in advance.

2.Accrued interest on notes receivable is $500.

3.Three years of rent, totaling $30,000, was paid in advance at the beginning of the year.

4.Services totaling $2,900 had been performed but not yet billed at the end of the year.

5.Depreciation on equipment totaled $6,500 for the year.

6.Supplies purchased totaled $800. By year-end, only $200 of supplies remained.

7.Salaries owed to employees at the end of the year total $9,500.

8.Nine months of insurance, totaling $30,000, was paid in advance on October 1^st.

9.Janitorial services of $5,000 were consumed but no invoice received from the vendor.

10.Revenues of $75,000, Expenses of $40,000 and Dividends of $3,000 appear on Adjusted Trial Balance and need closed out to Retained earnings.

Example: Debit Unearned Revenue____________________________$100,000

Credit Service Revenue______________________________$100,000

Ex. 10

The following information is available for ABC Corporation for the year ended December 31, 2016:

Collection of principal on long-term loan to a supplier$16,000

Acquisition of equipment for cash10,000

Proceeds from the sale of long-term investment at book value22,000

Issuance of common stock for cash20,000

Depreciation expense25,000

Repayment of bonds payable at carrying (book) value34,000

Payment of cash dividends6,000

Net income30,000

Purchase of land by issuing bonds payable40,000

Ex. 10 (Cont.)

In addition, the following information is available from the comparative balance sheet for ABC Corporations at the end of 2015 and 2016:

20162015

Cash$148,000$90,000

Accounts receivable (net)25,00010,000

Prepaid insurance19,00012,000

Total current assets$192,000$112,000

Accounts payable$30,000$19,000

Salaries and wages payable6,0007,000

Total current liabilities$36,000$26,000

Instructions:

ABC Corporation's statement of cash flows for the year ended December 31, 2016, using the indirect method.

Ex. 8 A review of the ledger of Nationwide Insurance LLC at December 31, 2016, produces the following data pertaining to the preparation of initial and adjusting entries: (a) Received Cash upon signing a Notes Payable of $200,000. This is a 9-month note, dated September 1, 2014, with a 9% interest rate. (b) Prepaid $540,000 for office rentals. During 2016, it signed 10 leases as shown below: Date July 1 (c) Term (in months) 12 Monthly Rent $ 4,500 Number of Leases 10 Received $75,000 in advance on customer contracts. During 2016, the company entered into 5 monthly service contracts with clients. The clients prepaid for the services to be provided over the contract period in an even manner. Date Nov 1 Service PeriodAmount Number of (in months) Per Contract Contracts 6 $ 15,000 5 Instructions: 1) Prepare the entry for the initial transaction when the note was signed, the rent was prepaid and the customer contract was paid in advance. 2) Prepare the adjusting entries at December 31, 2016. Show all computations. Ex. 9 Prepare year-end adjustments at December 31, 2016 for the following transactions. Make each adjustment using the proper journal entry form indicating Debit/Credit, accounts and the amount. Dates and explanations can be omitted. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. $10,000 of services have been performed for a client who paid in advance. Accrued interest on notes receivable is $500. Three years of rent, totaling $30,000, was paid in advance at the beginning of the year. Services totaling $2,900 had been performed but not yet billed at the end of the year. Depreciation on equipment totaled $6,500 for the year. Supplies purchased totaled $800. By year-end, only $200 of supplies remained. Salaries owed to employees at the end of the year total $9,500. Nine months of insurance, totaling $30,000, was paid in advance on October 1st. Janitorial services of $5,000 were consumed but no invoice received from the vendor. Revenues of $75,000, Expenses of $40,000 and Dividends of $3,000 appear on Adjusted Trial Balance and need closed out to Retained earnings. Example: Debit Unearned Revenue____________________________$100,000 Credit Service Revenue______________________________$100,000 Ex. 10 The following information is available for ABC Corporation for the year ended December 31, 2016: Collection of principal on long-term loan to a supplier Acquisition of equipment for cash Proceeds from the sale of long-term investment at book value Issuance of common stock for cash Depreciation expense Repayment of bonds payable at carrying (book) value Payment of cash dividends Net income Purchase of land by issuing bonds payable $16,000 10,000 22,000 20,000 25,000 34,000 6,000 30,000 40,000 Ex. 10 (Cont.) In addition, the following information is available from the comparative balance sheet for ABC Corporations at the end of 2015 and 2016: 2016 2015 Cash $148,000 $90,000 Accounts receivable (net) 25,000 10,000 Prepaid insurance 19,000 12,000 Total current assets $192,000 $112,000 Accounts payable Salaries and wages payable Total current liabilities $ 30,000 6,000 $ 36,000 $19,000 7,000 $26,000 Instructions: Prepare ABC Corporation's statement of cash flows for the year ended December 31, 2016, using the indirect method