I am working on Module 6 Homework for ACCCTG 231 and am struggling to understand the concepts. Any assistance would be very helpful attached is the assignment.

Module 6 Homework Use complete sentences. Show and label all work to receive any credit for the homework. 1. Terminology and Concepts-- Adjusting Entries: See text pages 189-192. a. If utility expense accrues as incurred, why do we wait until we get the bill to record it? b. What are adjusting entries adjusting? c. What is being deferred in a deferral adjusting entry? Provide a real life example for an expense deferral and a revenue deferral that you have personally encountered. d. What is being accrued in an accrual adjusting entry? Provide a real life example for an expense accrual and a revenue accrual that you have personally encountered. e. Which financial statements would be affected if revenue earned, but not yet received was not included in the books for the period? How would they be affected? Who would care if the entry were not made? f. Should a firm record in the accounting records interest expense incurred but not yet paid? Why? g. Should the firm record in the accounting records the use of supplies that have already been paid for (the supplies were included in the supplies account when they were acquired)? Why? 2. Depreciation: Salvo, Inc. acquired a building for $244,000 on January 1. Included in the purchase is land for which $10,000 is allocated to the land cost. The building is estimated to have a $14,000 residual value and a 10 year useful life. What is the expense for the first year? What is the expense for the tenth year? What is the accumulated depreciation in the tenth year? Banana Wind Travel Company purchased office equipment for $24,000 on July 1 of the current year. The equipment is estimated to serve for 6 years and have no junk value. What is the depreciation expense in the first year? What is the depreciation expense in the second year? What is the accumulated depreciation in the second year? How does the matching principal relate to depreciation? Give an example. 3. Determine which of the following events would require adjustment (i.e. an adjusting entry) at the end of the current one month period. Do not attempt to determine the amount of the adjustment, but DO specify the accounts that would require adjustment and if they would be debited or credited. Module Homework 6--1 a. Paid rent for one year in advance. - Increase in asset because the company has the right to occupy the rental space for one year. (Debit) Expense after 1 month used expense = increase debits - Expense Accrual- increase debit b. Purchased a new delivery vehicle. - Expense Deferral- attempt to generate revenue in future periods increase (Debit) c. Made a cash sale to a customer. -Revenue Accrual increase (Credit) d. Made a sale to a customer on account. e. Purchased $900 of office supplies on open account. f. Received $1,000 cash from a customer for services to be performed four months from now. g. Paid $90 cash for gas to put in the delivery vehicles. h. Borrowed $1,200 cash from the bank at a 10% interest rate, payments due on the 15 th of each month. Module 6 Homework Use complete sentences. Show and label all work to receive any credit for the homework. 4. A Trial Balance is often used to identify events that need adjusting entries. Below is a Trial Balance as of July 31, XX, for Les Cash, and his wife Mora. Together they own and operate the Cash Inn. Determine which of the accounts would require adjustment (i.e. an adjusting entry) at the end of the current one month period for the Cash Inn. Do not attempt to determine the amount of the adjustment, but DO specify the accounts in a General Journal entry that would be required by the adjustment. Include the proper measurement date in creating the entry. Account Cash Billings Supplies Prepaid Insurance Building Accumulated Depreciation - Building Land A/P Salary Payable Prepaid Reservations Note Payable 15yr Les and Mora Cash Capital Lodging Fees Utility Expense Salary Expense Totals 5. Dr. $1048 460 840 1200 $140000 Cr. 20000 1000 410 600 3300 102000 6519 16540 621 4200 149369 149369 Prepare the adjusting entries using good form for each of the following situations as of January 31 (measurement date) for the one month of January: Module Homework 6--2 a. Purchased a one-year insurance policy on January 2 for $2,400. b. On January 1, the supplies account indicated a $680 balance. On January 31, a physical inspection reveals $200 on hand. c. Equipment was purchased last October 1 for a cost of $10,000. It is estimated to have a 5 year useful life and a $500 residual value. What is the depreciation adjusting entry for January? d. A customer had prepaid $1,200 for future services last September 10. At January 31, all but $200 of the work has been performed in January. e. Made arrangements with the local paper to run an ad every Wednesday for $50 each. There are four Wednesdays in January. At January 31, the bill had not yet been received. All accruals are done once a month. f. As per a contract we have completed performance on a service agreement for a client in the amount of $320. As of January 31, the client had not yet been billed. Use complete sentences. Show and label all work to receive any credit for the homework. 6. E 7.9 on page 206 of the text. Prepare the adjusting entry for the month ending in October 31. Indicate the effect each adjustment would have on net income: A. Plumbing had $35,000 contract with a construction company to perform plumbing services for a home under construction. Payment was to be received at the end of the job. As of October 31, $8,000 worth of services had been performed. B. Hutchinson State Bank made a $10,000 loan to a customer on October 1. The terms called for principal and interest of 8 % to be paid at the end of one year. HSB prepares monthly financial statements. C. Davis Inc. a real estate company, rents office space to a lawyer for $1,200 a month. The invoice for October had not been sent as of October 31. 7. E 7.10 on page 206 of the text. Prepare the adjusting entry for the month ended February 28th and indicate the effect each adjustment would have on net income: A. On Feb. 1 Doan Company received a $6,000 retainer from a client. By the end of February Doan had earned $4,000 of their retainer. B. During January $24,000 in magazine subscriptions were received by MG Corp. The subscriptions were for 12 monthly issues of Summer Sport, beginning with the month of Feb. MG Corp. prepares monthly financial statements. C. Weisz Insurance Company sells policies that run on a calendar year basis. It sold $60,000 of insurance policies and collected the cash in early January. Weisz prepares monthly financial statements. 8. E 7.11 on page 206 of the text. Prepare adjusting entry for the month ended May 31, and indicate the effect each adjustment would have on net income. Module Homework 6--3 A. The May Telephone bill for Scheele Company arrived in the accounting department on June. The invoice totaled $210. B. Bailey Inc. had an arrangement with a local newspaper to run a full page ad every Sunday. The cost of each ad is $350. The newspaper sends Bailey a bill on the 15 th of the next month. There are 4 Sundays in the month of May. C. Santoni borrowed $50,000 on October 1. The terms of the note called for repayment of principal and interest of 7% one year from the date of the note. Santoni prepares monthly financial statements. 9. Terminology and Concepts -- Closing Entries. See text pages 192-199. a. What would be the problem if the closing entries were not made? b. After the closing process is completed, what is the nature of the accounts that remain with balances? What is the nature of accounts that are \"closed\"? c. Would the Salary Expense account show a balance on the first day of the period after closing? Why? d. Would the Cash account show a balance on the first day of the period after closing? Why? Module Homework 6--4 Adjusting Entries Application This is an in-class exercise. You should not start it before class. You are the Accountant for Wooly Consulting. Jim sits down with you and provides the following information. Prepare adjusting entries in a General Journal (page supplied at Homework page 6-4 following) from the transactions provided below. For reference, you will need pages Module Homework 4 Homework Pages you used earlier for this project. You are preparing adjusting entries for the one month period ended June 30, 20XX. Normally this would be the sequence of step in the process: 1. Prepare Adjusting Entries for the seven transactions below using the General Journal provided on Homework 6-5 that follows this page. 2. Post the amounts from these entries in your General Journal to the General Ledger used earlier in Module 4 for this project. 3. Find new account balances for the General Ledger accounts after posting all of the transactions. 4. Prepare an Adjusted Trial Balance from the General Ledger, only after posting has been completed, using page Homework page 6-7. Your Instructor will provide you guidance on how to complete the above elements. To better understand the purpose of AJEs and how they fit into the cycle, complete the following requirements in addition to your Instructors directions: You should complete the following in the table on Module Homework page 6-6: 1. What financial statements were affected by each entry? Number your answer to correspond to the number of the adjusting events above. 2. Indicate whether the entry is an accrual adjusting entry, or a deferral adjusting entry. Adjusting Entry Events: 1. Jim recalls finishing up a job search for Mack Brown. He forgot to bill Mack the $980. 2. Hoops had worked 8 ($10/hr) hours as of the end of June. He will not be paid until July 5. Module Homework 6--5 3. An inspection of the insurance policy purchased from No State Insurance on June 12 indicates that it is a 12 month policy that included coverage for the entire month of June. Recall it was $2,400 for 12 months coverage. 4. Jim brought in the water bill for June, dated July 10 for $64. The bill is due upon receipt. 5. Jim counted the supplies remaining in the supply cabinet. The supply cabinet physical count reveals that there is only $80 of supplies remaining. 6. The last payment on the note was on June 21. As of June 30, 9 days of interest at 10%, has accrued but not yet been paid. (Round the result to the nearest dollar.) 7. The car is considered to have a useful life of 48 months with $3,920 salvage value. The computer and equipment is considered to have a 3 year life (36 months) with no salvage value. Round your calculation results to the nearest whole dollar. Assume Wooly had the asset for the entire month. General Journal Date Account Debit Module Homework 6--6 Credit Adjusting Entries Application Continued 1. What financial statements were affected by each entry? Number your answer to correspond to the number of the adjusting events above. 2. Indicate whether the entry is an accrual adjusting entry, or a deferral adjusting entry. Event 1. 2. 3. 4. 5. 6. 7. Financial Statements Affected Module Homework 6--7 Accrual or Deferral ___________________________________ Adjusted Trial Balance __________________________ Account Debit Module Homework 6--8 Credit Module Homework 6--9 Closing Entries Application Your Instructor will provide guidance on how to use these pages. Using the Adjusted Trial Balance you created on Homework page 6-7, of the project, prepare the closing entries, post them to the Taccounts of the General Ledger from Module 4, find new account balances, then prepare a post closing trial balance using page Homework 6-9. General Journal Date Account Debit __________________________ Module Homework 6--10 Credit Post-Closing Trial Balance __________________________ Account Debit Module Homework 6--11 Credit