Question 11 -- / 1 Sunset Corporation began operations on January 1, 2020. During the year, the following transactions occurred: Jan 1, 20 Sunset's owners invested $60,000 cash into the company. Feb 24, 20 Sunset purchased $8,000 of inventory on account. Mar 3,20 Sunset purchased another $5,000 of inventory from the same supplier, on account. Mar 16, 20 The Company paid off all amounts owning to the supplier Mar 20, 20 The Company sold goods for $12,000 to Sunshine Corporation on account. April 5, 20 Sunset pays its owners a dividend of $8,000. How should the transaction on Apr 5, 2020 be recorded? Debit Cash $8,000, Credit Investment $8,000 Debit Common Shares $8,000, Credit Cash $8,000 Debit Dividends $8,000, Credit Cash $8,000 Debit Cash $8,000, Credit Dividend Payable $8,000 Question 12 --/1 You are the controller for Global Company and must prepare the adjusting entries for the year ending December 31, 2020. The unadjusted trial balance is shown below. Debit Credit 32,000 135,000 62,000 263,000 750,000 150,000 158,000 Account Title Cash Accounts Receivable Prepaid Insurance Inventory Building Accumulated Depreciation Accounts Payable Unearned Revenue Bonds payable Common Shares Retained Earnings Revenues Expenses TOTAL 82,000 200,000 275,000 167,000 525,000 315,000 $1,557,000 $1.557.000 Expenses TOTAL 315,000 $1,557,000 $1,557,000 The following information is also available: 1. Expired insurance for the period is $31,000. 2. The building depreciates at $75,000 yearly. 3. An invoice was found showing that Global earned $12,000 of the unearned revenue on November 1, 2020. This invoice had not been recorded at year-end. 4. In December, Global earned $8,000 for services but did not mail the service invoice to the client until the end of December 5. Salaries worth $5,000 were earned by employees but not paid or recorded at year end. Use the information above to answer the next five questions. Which adjusting entry is needed to account for Prepaid Insurance on December 31, 2020? Debit Prepaid Insurance $31,000 Credit Cash $31,000 Debit Prepaid Insurance $62,000 Credit Insurance Expense $62,000 Debit Insurance Expense $31,000 Credit Prepaid Insurance $31,000 Debit Insurance Expense $62,000 Credit Prepaid Insurance $62,000 Question 13 -- / 1 Using the information in question 12 , which adjusting entry is needed to account for depreciation on December 31, 2020? Debit depreciation Expense $75,000 Credit Accumulated depreciation $75,000 2. Debit Accumulated depreciation $75,000 Credit depreciation Expense $75,000 3 Debit depreciation Expense $75,000 Credit Building $75,000 Debit depreciation Expense $150,000 Credit Building $150,000 Question 14 -- / 1 Using the information in question 12 , which adjusting entry is needed to record transaction 3 on December 31, 2020? Debit unearned revenue $12,000 Credit Revenues $12,000 N 2 Debit unearned revenue $12,000 Credit Prepaid revenue $12,000 3 Debit Unearned revenue $12,000 Credit Cash $12,000 4 Debit Prepaid revenue $12,000 Credit Revenue expense $12,000 Question 15 --/1 Using the information in question 12 , which adjusting entry is needed to record transaction 4 on December 31, 2020? Debit account receivable $8,000 Credit Revenues $8,000 2. Debit Prepaid revenue $8,000 Credit Revenue $8,000 3 3 Debit Account payable $8,000 Credit revenue $8,000 Debit Revenue $8,000 Credit Cash $8,000
