Need help with accounting principals
Accounting Principles I - Online Chapters 3 & 4 - Exam - Part II Complete the following activity and save this file on your hard drive. Then submit your file to your instructor on Canvas. NAME:_____ PART A (24 Points) In the journal for McGill Company provided below, record the appropriate adjusting entries as of December 31. Please note that McGill Company has not prepared any adjusting entries for the current year prior to December 31. a. The Store Supplies account showed a beginning balance of $700 and purchases of $500. Unused store supplies at the end of the year were counted and totaled $300. b. On December 1, the company paid three months rent in advance, debiting Prepaid Rent for $1,800. c. Equipment purchased January 1 of the current year for $26,000 was estimated to have a useful life of 5 years with $1,000 salvage value. d. Wages are paid each Friday for a 5-day week. The salary is set at a fixed rate of $800 per day, and the accounting period ended on Wednesday. e. On November 1, the company accepted a $10,000, 12%, 9-month Note Receivable. An adjusting entry should be made to accrue the interest on this note. f. The balance in Unearned Commissions Revenue at December 31, is $1,400. This represents a customer deposit for which one-half has been earned as of December 31. McGILL COMPANY GENERAL JOURNAL DATE PART B (30 Points) ACCOUNT TITLES DR CR Below is an Adjusted Trial Balance for Green Company for the year ended December 31. In the space provided on the next two pages: Required: a. Record the appropriate closing entries. (Third line explanations are not necessary.) b. Prepare a Post-Closing Trial Balance. GREEN COMPANY Adjusted Trial Balance December 31, 20xx Cash Account Receivable Office Supplies Office Equipment Accumulated Depreciation, Office Equipment Accounts Payable C.R. Green, Capital C.R. Green, Drawing Commissions Revenue Interest Revenue Depreciation Expense Salary Expense Utility Expense TOTALS DEBIT CREDIT $ 1,150 3,600 1,500 10,000 $ 4,000 700 8,000 1,200 7,100 200 200 2,200 150 $ 20,000 $ 20,000 GREEN COMPANY GENERAL JOURNAL DATE ACCOUNT TITLE DR CR GREEN COMPANY Post-Closing Trial Balance December 31, 20xx DEBIT PART C (16 Points) ESSAY QUESTIONS CREDIT Required: For EACH of the two questions below, write at least one full paragraph in response to the question asked. Be sure each of your paragraphs has a topic sentence. Please pay attention to your spelling, grammar and punctuation. Do not plagiarize from your textbook or any other source. Be sure your answers are in your own words. 1. Explain why adjusting entries should be made at the end of an accounting period. There are two categories of adjusting entries, Accrual Adjustments and Deferral Adjustments. Explain each category fully and give at least one example of each. 2. The long-term liability section of Beta Company's Balance Sheet includes the following accounts: Notes Payable (due in 5 years) Mortgage Payable Salaries Payable $100,000 250,000 75,000 Accumulated Depreciation 125,000 Total long-term liabilities $550,000 Beta Company is an established company and does not experience any financial difficulties or have any cash flow problems. Identify at least two items in the longterm liability section that are questionable and explain where the placement on the balance sheet would be more appropriate and why
