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However, as the accountant of Loong Company, you notice the following additional informationmay require some more adjusting entries before preparing the financial statements: ( 1
However, as the accountant of Loong Company, you notice the following additional informationmay require some more adjusting entries before preparing the financial statements: On November a customer paid $ to Loong Company in advance for an orderand the transaction was immediately recorded. Eventually half of the services were deliveredin December. Wages had been paid up to December Three staff of Loong had worked throughoutthe last days of December and they will be paid on January next year. Wage rate per staffis $ per day. On October the company lent $ to one of its employees by signing a one yearnote at interest rate per annum. The principal plus interest will be payable by theemployee at the end of the loan period. On December a physical count was taken by the staff of Loong showing thatsupplies on hand at year end amounted to $ The estimated useful life of equipment is seven years and straightline method is adopted. Itwas found that depreciation expense had been updated to September, only. On January the Company paid and recorded in its books a two years insurancepremium covering its facilities. On November $ rent was paid to the Companys landlord for December and January This transaction has been recorded in its books on the same day. On December the Company declared a cash dividend of $ per share to be paid in thefollowing year. On December A $ electricity bill belonged to one of the owners home wasposted to Loong Company. The income taxes expense for the year was estimated at $ Required:a Prepare the necessary adjusting journal entries on December so as to bring thefinancial records of Loong uptodate. Use the account titles given in the Trial Balance orcreate new accounts where appropriate. Workings are required, but explanations areNOT required. If no adjusting entries are required, state No entry and name accountingprinciple applied. marks b Prepare the income statement of Loong Company for the year ended December showing breakdown of items under the captions of Total Revenues, Total Expenses, Profitbefore Tax, Profit after Tax. marks c Prepare the statement of financial position as of December showing breakdown ofitems under the captions of Assets, Liabilities, and Shareholders Equity Vertical format marks Question marks Loong Company is engaged in providing sports coaching services. The company nomally adjusts its book monthly and closes its books on December. Adjusting entries have already been made for the first months, except otherwise specified. Loong Company's financial year ends on December and its umadjusted trial balance as of that date is as follows: Loong Company Unadjusted Trial Balance As at December tableAccount Title,Debit $Credit SCashAccourts receivable,Prepaid rent,Prepaid insurance,Interest receivable,SuppliesNotes receivable,EquipmentAccumulated depreciation: Equipment,,Income taxes payable,,Unearned revenue,,Accounts payable,,Notes payable due on December Share capital sharesRetained eamings,,Services revenue,,Interest revenue,,Wages expense,Supplies expense,Rent expense,Advertising expense,Depreciation experse: Equipment,Insurance expense,Income taxes expense,$$
However, as the accountant of Loong Company, you notice the following additional informationmay require some more adjusting entries before preparing the financial statements:
On November a customer paid $ to Loong Company in advance for an orderand the transaction was immediately recorded. Eventually half of the services were deliveredin December. Wages had been paid up to December Three staff of Loong had worked throughoutthe last days of December and they will be paid on January next year. Wage rate per staffis $ per day.
On October the company lent $ to one of its employees by signing a one yearnote at interest rate per annum. The principal plus interest will be payable by theemployee at the end of the loan period.
On December a physical count was taken by the staff of Loong showing thatsupplies on hand at year end amounted to $
The estimated useful life of equipment is seven years and straightline method is adopted. Itwas found that depreciation expense had been updated to September, only.
On January the Company paid and recorded in its books a two years insurancepremium covering its facilities.
On November $ rent was paid to the Companys landlord for December and January This transaction has been recorded in its books on the same day.
On December the Company declared a cash dividend of $ per share to be paid in thefollowing year.
On December A $ electricity bill belonged to one of the owners home wasposted to Loong Company.
The income taxes expense for the year was estimated at $
Required:a Prepare the necessary adjusting journal entries on December so as to bring thefinancial records of Loong uptodate. Use the account titles given in the Trial Balance orcreate new accounts where appropriate. Workings are required, but explanations areNOT required. If no adjusting entries are required, state No entry and name accountingprinciple applied. marks
b Prepare the income statement of Loong Company for the year ended December showing breakdown of items under the captions of Total Revenues, Total Expenses, Profitbefore Tax, Profit after Tax. marks
c Prepare the statement of financial position as of December showing breakdown ofitems under the captions of Assets, Liabilities, and Shareholders Equity Vertical format marks
Question marks
Loong Company is engaged in providing sports coaching services. The company nomally adjusts its book monthly and closes its books on December. Adjusting entries have already been made for the first months, except otherwise specified. Loong Company's financial year ends on December and its umadjusted trial balance as of that date is as follows:
Loong Company
Unadjusted Trial Balance
As at December
tableAccount Title,Debit $Credit SCashAccourts receivable,Prepaid rent,Prepaid insurance,Interest receivable,SuppliesNotes receivable,EquipmentAccumulated depreciation: Equipment,,Income taxes payable,,Unearned revenue,,Accounts payable,,Notes payable due on December Share capital sharesRetained eamings,,Services revenue,,Interest revenue,,Wages expense,Supplies expense,Rent expense,Advertising expense,Depreciation experse: Equipment,Insurance expense,Income taxes expense,$$
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