Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pr. 3-109-Adjusting entries. Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes

image text in transcribed
Pr. 3-109-Adjusting entries. Data relating to the balances of various accounts affected by adjusting or closing entries appear below. (The entries which caused the changes in the balances are not given.) You are asked to supply the missing journal entries which would logically account for the changes in the account balances. 1. Interest receivable at 1/1/07 was $1,000. During 2007 cash received from debtors for interest on outstanding notes receivable amounted to $5,000. The 2007 income statement showed interest revenue in the amount of $5,400. You are to provide the missing adjusting entry that must have been made, assuming reversing entries are not made. 2. Unearned rent at 1/1/07 was $5,300 and at 12/31/07 was $8,000. The records indicate cash receipts from rental sources during 2007 amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. 3. Accumulated depreciation-equipment at 1/1/07 was $230,000. At 12/31/07 the balance of the account was $270,000. During 2007 , one piece of equipment was sold. The equipment had an original cost of $40,000 and was 3/4 depreciated when sold. You are to prepare the missing adjusting entry. 4. Allowance for doubtful accounts on 1/1/07 was $50,000. The balance in the allowance account on 12/31/07 after making the annual adjusting entry was $65,000 and during 2007 bad debts written off amounted to $30,000. You are to provide the missing adjusting entry. 5. Prepaid rent at 1/1/07 was $9,000. During 2007 rent payments of $120,000 were made and charged to "rent expense." The 2007 income statement shows as a general expense the item "rent expense" in the amount of $125,000. You are to prepare the missing adjusting entry that must have been made, assuming reversing entries are not made. 6. Retained earnings at 1/1/07 was $150,000 and at 12/31/07 it was $210,000. During 2007 . cash dividends of $50,000 were paid and a stock dividend of $40,000 was issued. Both dividends were properly charged to retained earnings. You are to provide the missing closing entry

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Connect with your audience

Answered: 1 week ago