Question
Project Instructions Please read the following instructions and review the table below carefully. Then, enter answers for journal items [A] to [V] in the next
Project Instructions
- Please read the following instructions and review the table below carefully. Then, enter answers for journal items [A] to [V] in the next item in this lesson, called Project 1 Part 1 Journal Entries for Accrual Accounting.
- You may keep these instructions open in a separate browser or download the instructions as a PDF, and open it as you work through the exercise.
- Balance Sheet as of 12/31/20X0
Assets
Current Assets:
Cash 1,500,000
Accounts receivable, net 18,000
Inventory 50,000
Total current assets 1,568,000
Equipment 90,000
Goodwill 20,000
Total assets 1,678,000
Liabilities and shareholders' equity
Shareholders' equity:
Common stock, 20,000 shares
outstanding, $1 par ///20,000
Additional paid-in capital 280,000
Retained earnings 1,378,000
Total shareholders' equity 1,678,000
Total liabilities and shareholders' equity 1,678,000
Note that all additional paid-in capital (APIC) sub accounts (e.g., APIC-options and APIC-treasury stock), if any, are tracked in the Additional paid-in capital account on the Balance Sheet.
Project 1.1 Topic: Accrual Accounting
- On 1/1/20X1, Illini prepays 2-year $10,000 insurance premiums for certain assets: $4,000 for 20X1 and $6,000 for 20X2.
- Illini pays $30,000 utility fees and $20,000 rentals each year for 20X1 and 20X2.
- In 20X1, Illini incurs cash-based compensation expense of $100,000, for which $10,000 will be paid in Jan, 20X2 (others are paid in 20X1). In 20X2, Illini incurs cash-based compensation expense of $110,000. The actual total cash compensation payment made in 20X2 is $100,000.
- On 12/31/20X2, Illini receives $50,000 from a customer for a service it will provide in 20X3.
Project 1.1 Balance Sheet
Date | Account Name | Debit | Credit | |
1/1/20X1 | Prepaid insurance | [A] |
| |
Cash | [B] | |||
12/31/20X1 | Insurance expense | [C] |
| |
Prepaid insurance | [D] | |||
| ||||
12/31/20X1 | Utility expense | [E] |
| |
Rent expense | [F] |
| ||
Cash | [G] | |||
| ||||
12/31/20X1 | Compensation expense | [H] |
| |
Cash | [I] | |||
Wage payable | [J] | |||
| ||||
Jan, 20X2 | Wage payable | [K] |
| |
Cash | [L] | |||
| ||||
12/31/20X2 | Insurance expense | [M] |
| |
Prepaid insurance | [N] | |||
| ||||
12/31/20X2 | Utility expense | [O] |
| |
Rent expense | [P] |
| ||
Cash | [Q] | |||
| ||||
12/31/20X2 | Compensation expense | [R] |
| |
Cash | [S] | |||
Wage payable | [T] | |||
| ||||
12/31/20X2 | Cash | [U] |
| |
Unearned revenue | [V] |
Enter the correct journal entry for part [B] [C].[D]. [E]. [F].[G]. [H].[I].[J].[K].[L].[M].[N]. [O].[P].[Q].[R].[S]. [T].[U].[V].
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