P9-2 Recording and Reporting Current Liabilities with Discussion of Cash Flow Effects [The following information applies to the questions displayed below.) Roger Company completed the following transactions during Year 1. Roger's fiscal year ends on December 31. Jan. 8 Purchased merchandise for resale on account. The invoice amount was $14,800; assume a perpetual inventory system, 17 Paid January 8 invoice. Apr. 1 Borrowed $78,000 from National Bank for general use; signed a 12-month, 12% annual interest-bearing note for the money. June 3 Purchased merchandise for resale on account. The invoice amount was $17.220. July 5 Pald June 3 invoice. Aug. 1 Rented office space in one of Roger's buildings to another company and collected six months' rent in advance amounting to $9,000. Dec. 20 Received a $140 deposit from a customer as a guarantee to return a trailer borrowed for 30 days. 31 Determined wages of $9,500 were earned but not yet paid on December 31 (disregard payroll taxes). 1. Prepare journal entries for each of these transactions. Remember to write the date of each transaction. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) 2. Prepare the two adjusting entries required on December 31. Hint: one is for interest; the other is for rent. Remember to write the date of the adjusting journal entry. 3. Show how all of the liabilities arising from these transactions are reported on the balance sheet at December 31. ROGER COMPANY Balance Sheet (Partial) As of December 31 Current liabilities Note payable, short term Deposit on trailer Wages payable Interest payable Deferred rent revenue Total 4. For each transaction, state whether operating cash flows increase, decrease, or are not affected. (Write "No Effect" if there is no effect.) Effect Transaction January 8 January 17 April 1 June 3 July 5 August 1 December 20 December 31 P9-4 Recording and Reporting Accrued Liabilities and Deferred Revenue with Discussion of Accrual versus Cash Accounting [The following information applies to the questions displayed below.) During its first year of operations, Walnut Company completed the following two transactions. The annual accounting period ends December 31. a. Paid and recorded wages of $138,000 during Year 1; however, at the end of Year 1, three days' wages are unpaid and have not yet been recorded because the weekly payroll will not be paid to employees until January 6 of Year 2. Wages for the three days are $4,200. b. Collected rent revenue of $2,700 on December 12 of Year 1 for office space that Walnut rented to another company. The rent collected was for 30 days from December 12 of Year 1 to January 10 of Year 2 1. With respect to wages, provide the adjusting entry required at the end of Year 1 and the journal entry required on January 6 of Year 2. (If no entry is required for a transaction/event, write "No journal entry required".) 2. With respect to rent revenue, provide the journal entry for the collection of rent on December 12 and the adjusting entry required on December 31. (If no entry is required for a transaction/event, write "No journal entry required".) 3. What are the liabilities related to these transactions that should be reported on the company's balance sheet at December 31, Year 1? P9-11 Computing Present Values The following information applies to the questions displayed below.) On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of
