Need help with journal entries please.

A B D E F ABC Corporation Unadjusted Trial Balance December 31, 2021 Debit Credit Cash 393,125 Accounts receivable 300,000 Allowance for doubtful accounts Inventory - Allowance to Reduce Inventory to NRV Purchases 350,000 2 Prepaid insurance 4,167 3 Land 88,000 Building 500,000 5 Accumulated depreciation: building 16,570 5 Equipment 260,000 7 Accumulated depreciation: equipment 108,330 3 Delivery Trucks - Accumulated depreciation delivery trucks Investment in XYZ Company Stock 100,000 1 Patent 200,000 2 Accounts payable 116,184 3 Notes payable 100,000 Income taxes payable 47,667 5 Unearned rent revenue 15,000 5 Bonds Payable 1,000,000 7 Premium on Bonds Payable 81,105 3 Common stock 125,000 PIC In Excess of Par-Common Stock 40,000 Retained earnings i Treasury stock 50,000 2 Dividends 28,000 3 Sales Revenue 1,000,880 1 Unrealized Holding Losses/Gains on Trading Securities-NI 6 Advertising expense 9,240 5 Wages expense 62,150 JOffice expense 54,083 3 Depreciation expense 124,900 Utilities expense 33,571 Insurance expense 45,833 1 Income taxes expense 47,667 $ 2,650,736 $ 2,650,736 2 A - B J L K 1 2 3 4 C D E H 1 On January 1, 2021, ABC purchased a one-year liability insurance policy for $50,000 Upon purchase, the following journal entry was made: Dr Prepaid insurance 50,000 50,000 The expired portion of insurance must be recorded as of 12/31/21. Notice that the expired portion from January through November has been recorded already. Make sure that the Prepaid Insurance balance after the adjusting entry is correct. Cr Cash 5 6 2 Depreciation expense must be recorded for the month of December, The building was purchased on February 1, 2021 for $500,000 with a remaining useful life of 25 years and a salvage value of $3,000. The method of depreciation for the building is straight-line. The equipment was purchased on February 1, 2021 for $260.000 with a remaining useful life of 4 years and a salvage value of $1,800. The method of depreciation for the equipment is double-declining balance. Depreciation has been recorded for the building and equipment for months February through November. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 3 On December 1, 2021, XYZ Co. agreed to rent space in ABC's building for $5,000 per month and XYZ paid ABC on December 1 in advance for the first three months' rent, The entry made on December 1 was as follows: Dr Cash 15,000 Cr Unearned rent revenue 15.000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/21. 4 Per timecards, from the last payroll date through December 31, 2021. ABC's employees have worked a total of 300 hours. Including payroll taxes, ABC's wage expense averages about $30 per hour. The next payroll date is January 5, 2022, The liability for wages payable must be recorded as of 12/31/21. 5 On November 30, 2021. ABC borrowed $100.000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months (on February 28, 2022), along with interest computed at an annual rate of 7%. The entry made on November 30 to record the borrowing was Dr Cash 100,000 Cr Notes payable 100,000 On February 28, 2022 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/31/21 must be accrued on the $100.000 note. 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2021, and the inventory on-hand at that time totaled $85,000, which reflects historical cost. Record the adjusting entry for properly recognizing 2021 Cost of Goods Sold. Hint: This was the first year of operations, so beginning inventory balance is zero 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Additionally. ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value al a total inventory level. A review of inventory data further indicated that the current retail sales value of the ending inventory is $75,000 and estimated costs of completion and shipping is 8% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC determined that their intangible asset might be impaired on December 31, 2021. Record the impairment adjustment, if any. The expected future undiscounted net cash flows for this intangible asset totals $175,000, and the fair value of the asset is $165,000. 54 55 56 57 58 59 60 61 62 8 On 7/1/21, ABC purchased 5,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $10 per share, or $50,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/21, ABC reissued 2,000 shares of the treasury stock at $15 per share. Record the journal entry required for the reissuance of the treasury stock. To refresh your memory, treasury stock is usually accounted for at cost. When treasury stock is reissued for more than its cost, a separate Paid-in Capital-Treasury Stock account should be used to account for the excess proceeds over cost. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 63 64 65 66 67 11 ADA DAD A H 1 K L B D E Interest through 12/31/21 must be accrued on the $100,000 note. 38 39 40 41 42 43 44 45 46 47 48 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2021, and the inventory on-hand at that time totaled $85,000, which reflects historical cost. Record the adjusting entry for properly recognizing 2021 Cost of Goods Sold. Hint: This was the first year of operations, so beginning inventory balance is zero. Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level. A review of inventory data further indicated that the current retail sales value of the ending inventory is $75,000 and estimated costs of completion and shipping is 8% of retail. Be sure to make an additional adjustment, it necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 7 It would be unusual for a company to have an asset impairment in Year 1. but for the sake of this example, ABC determined that their intangible asset might be impaired on December 31, 2021. Record the impairment adjustment, if any. The expected future undiscounted net cash flows for this intangible asset totals $175,000, and the fair value of the asset is $165,000. 8 On 7/1/21, ABC purchased 5,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $10 per share, or $50,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/21, ABC reissued 2,000 shares of the treasury stock at $15 per share. Record the journal entry required for the reissuance of the treasury stock To refresh your memory, treasury stock is usually accounted for at cost. When treasury stock is reissued for more than its cost, a separate Paid-in Capital-Treasury Stock account should be used to account for the excess proceeds over cost. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 9 On 12/31/21, ABC issued 20,000 shares of $1 par value common stock at the closing market price of $15 per share. Prepare ABC's journal entry to reflect the issuance of the stock on 12/31/21. To refresh your memory, a Paid-in Capital in Excess of Par account should be used to account fo excess proceeds over par value in a stock issuance transaction. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 10 On 7/1/21, ABC sold 10% bonds having a maturity value of $1,000,000 for $1,081,105, resulting in an effective yield of 8%. The bonds are dated 7/1/21, and mature 7/1/26. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/21. Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. 11 ABC Corporation prepares an aging schedule on 12/31/21 that estimates total uncollectible accounts at $40,000. Assuming that the allowance method is used, prepare the entry to record bad debt expense for the calendar year. 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 12 ABC Corporation purchased 5,000 shares of XYZ Company common stock for $20.00 per share on 11/30/21. The investment represents a 5% voting interest and is classified as a trading security. At 12/31/21, the stock is trading at $25.00 per share. Prepare the appropriate adjusting journal entry for end-of-year valuation purposes. 13 On 12/31/21, ABC Corporation exchanged equipment for two pickup trucks. The book value and fair value of the equioment given up were $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17.000, respectively. Assume ABC paid $8,000 in cash and the exchange has commercial substance. Prepare the approriate journal entry to reflect the nonmonetary exchange. 14 Do this final adjusting entry after preparing the Income Statement through the line "Income Before Income Taxes": Corporate taxes are due in four estimated quarterly payments on April 15, June 15, September 15, and December 15. However, for the purposes of this ABC illustration, we will assume that estimates are not paid, and that the tax is paid in full the return's March 15, 2022 due date. ABC's income tax rate is 20%. The entire year's income tax expense was estimated at the beginning of 2021 to be $52,000, so January through November income tax expense recognized amounts to $47,667 (11/12 months), Since we are assuming estimates are not paid during the year, the balance in Income taxes payable represents income tax accrued for January through November. Assume no deferred tax assets or deferred tax liabilities Based on the income before income taxes figure from the income statement, calculate and record December's income tax expense adjustment so that the entire year's tax expense is correct (i.e. the difference between total income tax expense and the amount already accrued through Novem 12/31/21 Adjusting Journal Entries JE # Debit Credit Account Titles 1 Insurance Expense Prepaid Insurance To record expired insurance for December 2 Depreciation Expense Accumulated Depreciation - Building Accumulated Depreciation - Equipment To record monthly depreciation for building and equioment 3 Unearned Rent Revenue Rent Revenue To record month month rent revenue earned 4 Wage Expense Wages Payable To record accrued wages payable 5 Interest Expense Interest Payable To accrue interest for 1 month on note payable 6 Cost of goods sold Inventory Purchases To recognize COGS and adjustment of inventory balance To record year-end market value adjustment to reflect LCM 7 Loss on impairment Patent To record impairment on patent 8 Cash Treasury stock Paid in capital To record reissuance of treasury stock 9 Cash Common stock Paid in capital To record proceeds from issuance of common stock 10 Interest Expense Premium on Bonds Payable Interest Payable To record the accrual of interest and discount amortization 11 Bad Debit Expense Allowance for Doubtful Accounts To record the estimate for bad debts expense 12 To record and of year adiusting entry for stock investment A B D E F 27 Purchases 28 29 To recognize COGS and adjustment of inventory balance 30 31 32 33 To record year-end market value adjustment to reflect LCM 34 35 36 7 Loss on impairment Patent To record impairment on patent 37 38 39 40 8 Cash Treasury stock Paid in capital To record reissuance of treasury stock 41 42 43 44 9 Cash Common stock Paid in capital To record proceeds from issuance of common stock 45 46 47 48 49 50 10 Interest Expense Premium on Bonds Payable Interest Payable To record the accrual of interest and discount amortization 51 52 53 54 55 11 Bad Debit Expense Allowance for Doubtful Accounts To record the estimate for bad debts expense 56 57 12 58 59 60 To record end of year adjusting entry for stock investment 61 62 13 63 64 65 66 67 68 To record accounting entry for nonmonetary exchange 69 70 14 Income tax expense Income tax payable To record adjusting entry for annual income tax expense 71 72 73 74 75 76 A B D E F ABC Corporation Unadjusted Trial Balance December 31, 2021 Debit Credit Cash 393,125 Accounts receivable 300,000 Allowance for doubtful accounts Inventory - Allowance to Reduce Inventory to NRV Purchases 350,000 2 Prepaid insurance 4,167 3 Land 88,000 Building 500,000 5 Accumulated depreciation: building 16,570 5 Equipment 260,000 7 Accumulated depreciation: equipment 108,330 3 Delivery Trucks - Accumulated depreciation delivery trucks Investment in XYZ Company Stock 100,000 1 Patent 200,000 2 Accounts payable 116,184 3 Notes payable 100,000 Income taxes payable 47,667 5 Unearned rent revenue 15,000 5 Bonds Payable 1,000,000 7 Premium on Bonds Payable 81,105 3 Common stock 125,000 PIC In Excess of Par-Common Stock 40,000 Retained earnings i Treasury stock 50,000 2 Dividends 28,000 3 Sales Revenue 1,000,880 1 Unrealized Holding Losses/Gains on Trading Securities-NI 6 Advertising expense 9,240 5 Wages expense 62,150 JOffice expense 54,083 3 Depreciation expense 124,900 Utilities expense 33,571 Insurance expense 45,833 1 Income taxes expense 47,667 $ 2,650,736 $ 2,650,736 2 A - B J L K 1 2 3 4 C D E H 1 On January 1, 2021, ABC purchased a one-year liability insurance policy for $50,000 Upon purchase, the following journal entry was made: Dr Prepaid insurance 50,000 50,000 The expired portion of insurance must be recorded as of 12/31/21. Notice that the expired portion from January through November has been recorded already. Make sure that the Prepaid Insurance balance after the adjusting entry is correct. Cr Cash 5 6 2 Depreciation expense must be recorded for the month of December, The building was purchased on February 1, 2021 for $500,000 with a remaining useful life of 25 years and a salvage value of $3,000. The method of depreciation for the building is straight-line. The equipment was purchased on February 1, 2021 for $260.000 with a remaining useful life of 4 years and a salvage value of $1,800. The method of depreciation for the equipment is double-declining balance. Depreciation has been recorded for the building and equipment for months February through November. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 3 On December 1, 2021, XYZ Co. agreed to rent space in ABC's building for $5,000 per month and XYZ paid ABC on December 1 in advance for the first three months' rent, The entry made on December 1 was as follows: Dr Cash 15,000 Cr Unearned rent revenue 15.000 The unearned revenue account must be adjusted to reflect the amount earned as of 12/31/21. 4 Per timecards, from the last payroll date through December 31, 2021. ABC's employees have worked a total of 300 hours. Including payroll taxes, ABC's wage expense averages about $30 per hour. The next payroll date is January 5, 2022, The liability for wages payable must be recorded as of 12/31/21. 5 On November 30, 2021. ABC borrowed $100.000 from American National Bank by issuing an interest-bearing note payable. This loan is to be repaid in three months (on February 28, 2022), along with interest computed at an annual rate of 7%. The entry made on November 30 to record the borrowing was Dr Cash 100,000 Cr Notes payable 100,000 On February 28, 2022 ABC must pay the bank the amount borrowed plus interest. Assume the beginning balance for Notes Payable is correct. Interest through 12/31/21 must be accrued on the $100.000 note. 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2021, and the inventory on-hand at that time totaled $85,000, which reflects historical cost. Record the adjusting entry for properly recognizing 2021 Cost of Goods Sold. Hint: This was the first year of operations, so beginning inventory balance is zero 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Additionally. ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value al a total inventory level. A review of inventory data further indicated that the current retail sales value of the ending inventory is $75,000 and estimated costs of completion and shipping is 8% of retail. Be sure to make an additional adjustment, if necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 7 It would be unusual for a company to have an asset impairment in Year 1, but for the sake of this example, ABC determined that their intangible asset might be impaired on December 31, 2021. Record the impairment adjustment, if any. The expected future undiscounted net cash flows for this intangible asset totals $175,000, and the fair value of the asset is $165,000. 54 55 56 57 58 59 60 61 62 8 On 7/1/21, ABC purchased 5,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $10 per share, or $50,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/21, ABC reissued 2,000 shares of the treasury stock at $15 per share. Record the journal entry required for the reissuance of the treasury stock. To refresh your memory, treasury stock is usually accounted for at cost. When treasury stock is reissued for more than its cost, a separate Paid-in Capital-Treasury Stock account should be used to account for the excess proceeds over cost. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 63 64 65 66 67 11 ADA DAD A H 1 K L B D E Interest through 12/31/21 must be accrued on the $100,000 note. 38 39 40 41 42 43 44 45 46 47 48 6 ABC uses a periodic inventory system, and the ending inventory for each year is determined by taking a complete physical inventory at year-end. A physical count was taken on December 31, 2021, and the inventory on-hand at that time totaled $85,000, which reflects historical cost. Record the adjusting entry for properly recognizing 2021 Cost of Goods Sold. Hint: This was the first year of operations, so beginning inventory balance is zero. Additionally, ABC adheres to GAAP by recording ending inventory at the lower of cost and net realizable value at a total inventory level. A review of inventory data further indicated that the current retail sales value of the ending inventory is $75,000 and estimated costs of completion and shipping is 8% of retail. Be sure to make an additional adjustment, it necessary, to properly value ending inventory using the Loss and Allowance methodology. For Income Statement presentation purposes, be sure to use the Loss Method for accounting for adjustments of inventory to market value. 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 7 It would be unusual for a company to have an asset impairment in Year 1. but for the sake of this example, ABC determined that their intangible asset might be impaired on December 31, 2021. Record the impairment adjustment, if any. The expected future undiscounted net cash flows for this intangible asset totals $175,000, and the fair value of the asset is $165,000. 8 On 7/1/21, ABC purchased 5,000 shares of its own stock from existing stockholders as treasury stock. The cost of the treasury stock was $10 per share, or $50,000 in total. The effects of this transaction are already shown in the unadjusted trial balance. On 12/31/21, ABC reissued 2,000 shares of the treasury stock at $15 per share. Record the journal entry required for the reissuance of the treasury stock To refresh your memory, treasury stock is usually accounted for at cost. When treasury stock is reissued for more than its cost, a separate Paid-in Capital-Treasury Stock account should be used to account for the excess proceeds over cost. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 9 On 12/31/21, ABC issued 20,000 shares of $1 par value common stock at the closing market price of $15 per share. Prepare ABC's journal entry to reflect the issuance of the stock on 12/31/21. To refresh your memory, a Paid-in Capital in Excess of Par account should be used to account fo excess proceeds over par value in a stock issuance transaction. (See your Principles of Accounting textbook or Chapter 18 of your Intermediate Accounting textbook for a review.) 10 On 7/1/21, ABC sold 10% bonds having a maturity value of $1,000,000 for $1,081,105, resulting in an effective yield of 8%. The bonds are dated 7/1/21, and mature 7/1/26. Interest is payable semiannually on July 1 and January 1. ABC uses the effective interest method of amortization for bond premium or discount. Record the adjusting entry for the accrual of interest and the related amortization on 12/31/21. Hint: Develop an abbreviated amortization schedule to accurately determine the interest expense. 11 ABC Corporation prepares an aging schedule on 12/31/21 that estimates total uncollectible accounts at $40,000. Assuming that the allowance method is used, prepare the entry to record bad debt expense for the calendar year. 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 12 ABC Corporation purchased 5,000 shares of XYZ Company common stock for $20.00 per share on 11/30/21. The investment represents a 5% voting interest and is classified as a trading security. At 12/31/21, the stock is trading at $25.00 per share. Prepare the appropriate adjusting journal entry for end-of-year valuation purposes. 13 On 12/31/21, ABC Corporation exchanged equipment for two pickup trucks. The book value and fair value of the equioment given up were $20,000 (original cost of $65,000 less accumulated depreciation of $45,000) and $17.000, respectively. Assume ABC paid $8,000 in cash and the exchange has commercial substance. Prepare the approriate journal entry to reflect the nonmonetary exchange. 14 Do this final adjusting entry after preparing the Income Statement through the line "Income Before Income Taxes": Corporate taxes are due in four estimated quarterly payments on April 15, June 15, September 15, and December 15. However, for the purposes of this ABC illustration, we will assume that estimates are not paid, and that the tax is paid in full the return's March 15, 2022 due date. ABC's income tax rate is 20%. The entire year's income tax expense was estimated at the beginning of 2021 to be $52,000, so January through November income tax expense recognized amounts to $47,667 (11/12 months), Since we are assuming estimates are not paid during the year, the balance in Income taxes payable represents income tax accrued for January through November. Assume no deferred tax assets or deferred tax liabilities Based on the income before income taxes figure from the income statement, calculate and record December's income tax expense adjustment so that the entire year's tax expense is correct (i.e. the difference between total income tax expense and the amount already accrued through Novem 12/31/21 Adjusting Journal Entries JE # Debit Credit Account Titles 1 Insurance Expense Prepaid Insurance To record expired insurance for December 2 Depreciation Expense Accumulated Depreciation - Building Accumulated Depreciation - Equipment To record monthly depreciation for building and equioment 3 Unearned Rent Revenue Rent Revenue To record month month rent revenue earned 4 Wage Expense Wages Payable To record accrued wages payable 5 Interest Expense Interest Payable To accrue interest for 1 month on note payable 6 Cost of goods sold Inventory Purchases To recognize COGS and adjustment of inventory balance To record year-end market value adjustment to reflect LCM 7 Loss on impairment Patent To record impairment on patent 8 Cash Treasury stock Paid in capital To record reissuance of treasury stock 9 Cash Common stock Paid in capital To record proceeds from issuance of common stock 10 Interest Expense Premium on Bonds Payable Interest Payable To record the accrual of interest and discount amortization 11 Bad Debit Expense Allowance for Doubtful Accounts To record the estimate for bad debts expense 12 To record and of year adiusting entry for stock investment A B D E F 27 Purchases 28 29 To recognize COGS and adjustment of inventory balance 30 31 32 33 To record year-end market value adjustment to reflect LCM 34 35 36 7 Loss on impairment Patent To record impairment on patent 37 38 39 40 8 Cash Treasury stock Paid in capital To record reissuance of treasury stock 41 42 43 44 9 Cash Common stock Paid in capital To record proceeds from issuance of common stock 45 46 47 48 49 50 10 Interest Expense Premium on Bonds Payable Interest Payable To record the accrual of interest and discount amortization 51 52 53 54 55 11 Bad Debit Expense Allowance for Doubtful Accounts To record the estimate for bad debts expense 56 57 12 58 59 60 To record end of year adjusting entry for stock investment 61 62 13 63 64 65 66 67 68 To record accounting entry for nonmonetary exchange 69 70 14 Income tax expense Income tax payable To record adjusting entry for annual income tax expense 71 72 73 74 75 76