Required COURSE Materials:

Wheeling, Introduction to Agricultural Accounting, 2008 ISBN or Printed Copy version: ISBN: 9780840172686

Ch 4

4-4 . For each of the events below, select the appropriate adjusting journal entry that would be recorded at the end of the year (December 31). The Farmers purchased a one-year insurance policy on June 1 for $1800. No prepaid expenses existed at the beginning of the year. a. Prepaid Expenses $ 1,050.00 Change in Prepaid Insurance $ 1,050.00 b. Prepaid Expenses $ 750.00 Change in Prepaid Insurance $ 750.00 C. Change in Prepaid Insurance $ 1,050.00 Prepaid Expenses $ 1,051.00 d. Change in Prepaid Insurance $ 750.00 Prepaid Expenses $ 750.00 The Farmers spent $3,000 for the costs of growing a perennial crop and recorded these costs as expenses. The crop is not harvested during the same year that it was grown. No investment in growing crops existed in the accounting records at the beginning of the year. a. No adjusting entry is necessary under the accrual-adjusted approach. b. Change in Investment in Growing Crops $ 3,000.00 Cash Investment in Growing Crops $ 3,000.00 c. Cash Investment in Growing Crops $ 3,000.00 Change in Investment in Growing Crops $ 3,000.003-9 I For each of the multiple choice questions below. select the appropriate adjusting journal entry that would be recorded at the end at the year [December 311. The Farmers determined that their unpaid bills at the end of the year are $690. They will not pay the bills before December 31. TheyI had no bills at the beginning oi' the year. a. Accounts Payable 5 690.00 Change In Accounts Payable 5 690.00 b. Prepaid Expense 5 690.00 Change In Accounts Payable 5 690.00 (2. Change In Accounts Payable 5 690.00 Accounts Payable 5 690.00 d. Prepaid Expense 5 690.00 Accounts Payable 5 690.00 The Farmers determined that they owed $3500 in real estate and property taxes at the end of the year. They will not pay the taxes before December 31. They did not owe any taxes at the beginning of the year. a. Taxes Payable 5 3,500.00 Change in Taxes Payable 5 3,500.00 b. Taxes Payable 5 3,500.00 Cash 5 s,soo.oo c. Change in Accounts Payable 5 3,500.00 Accounts Payable 5 3,500.00 d. lItharige In Taxes Payable 5 3.50000 Taxes Payable 5 3,900.00 4-6 . Place a check mark beside each of the following events that would require an end-of-year adjustment. Assume that the end of the fiscal year is December 31. Cash was paid for a utility bill before the end of the year. x_A bill for veterinary services was received before the end of the year and will be paid the following year. x_Grain was sold on December 21 but the check was not received by December 31. A perennial crop was harvested and sold before the end of the year. All feed that was purchased during the year was used up by the end of the year No purchased market livestock were on hand at the end of the year. x_50 head of raised feeder pigs were on hand at the end of the year. X Raised grain for feed was still on hand at the end of the year.4-7 . For each of the multiple choice questions below, select the appropriate adjust-ing journal entry that would be recorded at the end of the year (December 31). Suppose that the Farmers estimated on December 31 that they owed income tax for $3,670. They will pay their taxes in February next year. They did not owe any income taxes at the beginning of the year. a. Taxes Payable $ 3,670.00 Change in Taxes Payable $ 3,670.00 b. Taxes Payable $ 3,670.00 Cash $ 3,670.00 C. Change in Taxes Payable $ 3,670.00 Taxes Payable $ 3,670.00 d. No entry is required under the accrual-adjusted approach The Farmers determine that the amount of current deferred taxes at the end of the year is $2,000. No current deferred taxes existed at the beginning of the year. a. Change in Taxes Payable $ 2,000.00 Current Deferred Taxes $ 2,000.00 b. Current Deferred Taxes $ 2,000.00 Change In Taxes Payable $ 2,000.00 C. Change in Taxes Payable $ 2,000.00 Taxes Payable $ 2,000.00 d. No entry is required under the accrual-adjusted approach