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Hello, i have 2 accounting questions need you help. The questions are in the attach file. 1. Information for making the year-end adjusting entries for
Hello, i have 2 accounting questions need you help. The questions are in the attach file.
1. Information for making the year-end adjusting entries for Zimmer Corp appears below. a) b) c) d) e) f) On March 1, 20x2, Zimmer purchased a three-year liability insurance policy at a cost of $3,960. Zimmer's accounting policy is to record prepaid insurance transactions as expenses and to make appropriate year-end adjusting entries. On November 30, 20x2, Zimmer renewed the annual lease on a building by paying the full amount of rent one year in advance on November 30, amounting to $36,000, which was recorded as prepaid rent. On May 1, 20x1, Zimmer purchased thirty $1,000 bonds of the local city at a cost of $30,000. The stated annual interest rate on the bonds is 5 percent, payable quarterly on May1, August 1, November 1, and February 1. Zimmer correctly recorded the interest received up to and including November 1. Zimmer's depreciable assets have a cost of $85,000 and are being depreciated on a straight-line basis with an estimated 20-year useful life and estimated residual value of $15,000. At the end of 20x2, Zimmer's revenue account had a credit balance of $3,200,000. During 20x2, Zimmer received $245,000 in advances; $130,000 of the proceeds was credited to revenue, and the remainder was credited to deferred revenue. At the end of 20x2, advances of $68,000 were still unearned. Salary transactions during 20x2 appear as follows: Salary payments in January 20x2 Salaries $7,50 $19,50 Payable 0 0 Salaries Expense Salary payments Feb 1 through December 26 $267,000 Salaries of $9,700 are payable at December 31. Balance, January 1, 20x2 g) The following information concerning advertising accounts was taken from Zimmer's ledger: Advertising expense, balance Jan 1, 20x2 Prepaid advertising, balance Jan 1, 20x2 $5,600 cr. 7,800 dr. Total disbursements made for advertising in 20x2 were $87,000 and were debited to advertising expense. The correct amount of advertising expense for 20x2 is $78,300. h) At the beginning of 20x2 the supplies account had a debit balance of $3,700. Purchases of supplies during 20x2 were debited to the supplies account and totalled $34,900. Supplies on hand at the end of 20x2 totalled $5,400. i) On January 12, 20x3, Zimmer received a bill for $3,000 from HiTech Security, Inc., for night security services rendered during December 20x2. No entry for the security services has been recorded. Required - Prepare the necessary December 31, 20x2, adjusting entries from the above information. 2. Sparwood Manufacturing factored $240,000 of their accounts receivable to General Factor Corp., on a without recourse basis. The receivables are transferred to General Factor, who takes over the full responsibility of collection. General Factor charged a finance charge of 4% of the dollar value of the receivables, and withheld 5% of the receivable value. Required - a) Prepare the general journal entry to reflect this transaction on Sparwood's books. b) Prepare the general journal entry to reflect this transaction on General Factor's booksStep by Step Solution
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