Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below) Cactus Company's annual accounting year ends on June 30. Assume it is June 30,

image text in transcribed

Required information [The following information applies to the questions displayed below) Cactus Company's annual accounting year ends on June 30. Assume it is June 30, and all of the entries except the following adjusting journal entries have been made a. The company earned service revenue of $2,800 on a special job that was completed June 29. Collection will be made during July; no entry has been recorded. b. On March 31, Cactus paid a six-month premium for property insurance in the amount of $3,400 for coverage starting on that date. Cash was credited and Prepaid Insurance was debited for this amount. c. At June 30, wages of $1,000 were earned by employees but not yet paid. The employees will be paid on the next payroll date, which is July 15. d. On June 1, Cactus collected two months' revenue of $550. At that date, Cactus debited Cash and credited Deferred Revenue for $550. One-half of it has now been earned but not yet recorded e. Depreciation of $1,600 must be recognized on equipment purchased on July 1 of the previous year f Cash of $4,800 was collected on May 1 for services to be rendered evenly over the next year beginning on May 1 Deferred Revenue was credited when the cash was received. Two months of this performance obligation have now been fulfilled but not yet recorded. g. The company owes interest of $700 on a bank loan taken out on February 1. The interest will be paid when the loan is repaid next year on January 31 h. The income after all adjustments except income taxes was $30,000. The company's federal income tax rate is 20%. Required 1. Determine the accounting equation effects of each required adjustment. (Enter any decreases to Assets, Liabilities, or Stockholders' Equity with a minus sign.) action Assets Liabilities Stockholders' Equity a. C. d. f. h

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

Not For Profit Entities Audit And Accounting Guide

Authors: AICPA

1st Edition

1937351971, 978-1937351977

More Books

Students also viewed these Accounting questions

Question

1. Identify and control your anxieties

Answered: 1 week ago