Individual Homework #2 Page 9 of 17 Problem #2: Year-End Adjusting Entries (54 points) Gandee Candy, a wholesale distributor of penny candy and other novelties, is a calendar-year corporation. The Company also provides consulting services under various types of contracts to purveyors of its products. The Company records adjusting entries annually immediately prior to preparing its GAAP financial statements. Required: Presented below are seven fact sets that require adjusting entries at December 31, 2020. Some fact sets also require you to prepare regular journal entries. Analyze the facts provided and prepare the required journal entries and the appropriate adjusting entries in proper general journal form. You must clearly present supporting calculations when requested. An unsupported correct answer will receive a deduction of two points. Throughout this problem you will record journal entries involving cash. I did not provide T-accounts for cash. Therefore, you will not post the cash portion of the entries. You should only use these accounts from the chart of accounts of Gandee Candy: Accounts Receivable Interest Expense Office Supplies Expense Accounts Payable Interest Receivable Prepaid Advertising Accumulated Depreciation Interest Revenue Prepaid Insurance Advertising Expense Interest Payable Prepaid Rent Cash Notes Payable Prepaid Salaries Consulting Revenue Notes Receivable Rent Revenue Deferred Consulting Revenue Office Equipment Salaries Expense Depreciation Expense Office Equipment Expense Salaries Payable Insurance Expense Office Supplies Be aware that you will not use every account listed above in your entries. ACFI 200 HW2 Fall 2020(1) Qdoo Emily Adan References Mailings Review View Help Search 1 One Page Multiple Pages Zoom 100% New Arrange Split Page Width Window All Gridlines cal Side to Side Navigation Pane View Side by side DI Synchronous Scroll Switch i Window Position Windows Window Macros Properties Movement Show Share on Individual Homework #2 Page 14 of 17 Fact Set #4 (6 points) On June 1, 2020, Gandes Candy received $72,000 cash from a client that represented fees received in advance for consulting services to be provided for one year beginning on June 1. Prepare the required journal entry to record the cash received from the client on June 1, 2020. Post the entry to the applicable T-account(s). ( points) DATE ACCOUNT NAMES DEBIT CREDIT At December 31, 2020, Gandes Candy determined that it must record an adjustment for the consulting services it provided from June 1 through December 31, 2020 Prepare the required adjusting journal entry to record the consulting services performed. Post the entry to the applicable T-accounts and compute their resulting balances. (points) ADJUSTING ENTRY: DATE ACCOUNT NAMES DEBIT CREDIT Supporting Computations Required: Deferred Consulting Revenge Consulting Revenue O BI PrtScn Home 9 End Poup Pgon Gridines Navigation Pane Multiple Pages Zoom 100% Page Width to Side New Arrange Split Window Al Switch Window MacOS DI Synchronous Scroll Roset Window Position. Window Prop Zoom Macros Individualiomwork #2 Page 15 of 17 Fact Set 5 (6 points) On September 12, 2020, Gandes Candy received $145,000 cash from a client that represented fees received in advance for a consulting project. Gandes Candy estimated that the entire project would require 3,000 staff hours. Prepare the required journal entry to record the cash received from the client on November 12, 2020. Post the entry to the applicable T-account(s). (> points) DATE ACCOUNT NAMES DEBIT CREDIT At December 31, 2020, Gandee Candy determined that 5,600 staff hours were used to date on the project. Gandee Candy determined that it must record an adjustment for the consulting services completed based on the percentage of the work performed Prepare the required adjusting journal entry to record the consulting services performed. Post the entry to the applicable T-accounts and compute their resulting balances (pt) ADJUSTING ENTRY: DATE ACCOUNT NAMES DEBIT CREDIT Supporting Computations Requiredi Deferred Consulting Revenue Consulting Revenue 19 o R PII x F di Prtsen Home End 570 DUp poon A % 5 6 7 8 9