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prepare an unadjusted trial balance,adjusting entries,closing journal entries this is all the info i was gave at year-end. For bookkeeping purposes, Ashleigh has adopted a
prepare an unadjusted trial balance,adjusting entries,closing journal entries
this is all the info i was gave
at year-end. For bookkeeping purposes, Ashleigh has adopted a policy to record payments and collections in advance into asset and liability accounts, respectively. The company's unadjusted trial balance at December 31, 2023 is shown below. All accounts have normal-side balances. 1. Ashleigh purchased its buildings in 2011 and its equipment in 2016 . The company depreciates its fixed assets according to the straight-line method. For the buildings, it uses estimates of 35 years for the useful life and $175,000 for the salvage value, For the equipment, it uses estimates of 15 years for the useful life and $120,000 for the salvage value. 2. On November 1, 2023, Ashleigh received $294,125 in advance from a client for architectural services to be provided over the next 5 months, November 1, 2023 through March 31, 2024. Ashleigh is providing the architectural services evenly over this 5-month period. 3. The Notes Payable balance relates to a bank loan Ashleigh took in 2022 that is payable in full on September 30, 2028. The loan agreement specifies that Ashleigh pay interest annually on September 30 at the rate of 7.95% per year. Ashleigh's bookkeeper made the proper entry for the first interest payment, on September 30,2023. (Hint - Think about the entry Ashleigh made on September 30, 2023.) 4. Ashleigh performed $261,585 of architectural services for several clients in the last few months of 2023 that it bas not yet billed, recorded or collected. 5. Ashleigh estimates that 6.40% of the 2023 year-end accounts receivable balance will not be collected. 6. On May 1, 2023, Ashleigh purchased an 18-month insurance policy for $268,560 and paid the full cost of the policy in advance. The policy provides coverage through October 31, 2024. Note - Contrary to the company's normal practice, Ashleigh's bookkeeper recorded the prepayment into the Insurance Expense account. Give the adjusting entry needed when a company uses the expense approach to record a payment in advance. 7. Ashleigh operates 5 days a week, Mondays through Fridays. Employees are paid each Thursday, for hours worked through the previous Friday. On Thursday, December 28, 2023, the last payday in 2023, Ashleigh paid its employees for hours worked during the pay period of December 18-22. The employees then worked the week of December 25. 29 , with December 25 and 26 being paid holidays. Ashleigh's payroll averages $7,890 per day. 8. On December 1, 2023, Ashleigh signed a 9-month lease to gain short-term access to additional building space. On that same date, Ashleigh prepaid the full 9 -month rental charge totaling $307,710. The prepayment covers the period December 2023 through August 2024. 9. Ashleigh started the year 2023 with an Office Supplies account balance of $112,825. During the year, Ashleigh made several purchases of supplies totaling $47,200. A physical count at year-end 2023 revealed the company had a total of $98,640 of supplies on hand. 10. The company's income tax rate for the year is 25%. (Hint-The income tax rate is applied to the company's income after all revenues and expenses have been considered except for the income tax charge.) Step by Step Solution
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