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Read each scenario, decide whether the company is using Cash basis or Accrual basis, and then enter your answer to the question. The Johnny Flowers
Read each scenario, decide whether the company is using Cash basis or Accrual basis, and then enter your answer to the question. The Johnny Flowers Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $880 for six months of advertising. Johnny Flowers Law Firm recorded $880 in the Prepaid Advertising account. If Johnny Flowers Law Firm had recorded their expenses using the other method, how much advertising expense would they have recorded for the two months ending February 28? Enter this value as a positive number. Seashore Home provides house-sitting for people while they are away on vacation. Some of its customers pay immediately after the job is finished. Some customers ask that the business send them a bill. As of the end of the year, Seashore Home has collected $780 from cash-paying customers. Seashore Home's remaining customers owe the business $2,550. Seashore Home recorded $780 of service revenue for the year. If Seashore Home had recorded their service revenue using the other method, how much service revenue would they have recorded for the year? Marvelous Occasions received $3,560 for services to be performed for the next 8 months on March 31 and recorded this transaction using the Unearned Revenue account. If Marvelous Occasions had recorded their service revenue using the other method, how much service revenue would they have recorded for the year? Sweet Catering completed the following selected transactions during May 2016: May 1: Prepaid rent for three months, $2,400 May 5: Received and paid electricity bill, $160 May 9: Received cash for meals served to customers, $3,220 May 14: Paid cash for kitchen equipment, $3,280 May 23: Served a banquet on account, $2,070 May 31: Made the adjusting entry for rent (from May 1). . May 31: Accrued salary expense, $3,780 May 31: Recorded depreciation for May on kitchen equipment, $370 If Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May? If there is a loss, enter it with parentheses or a negative sign. Identify whether each account would appear on the Balance Sheet or the Income Statement. Insurance Expense Salaries (and Wages) Expense Prepaid Insurance Accumulated Depreciation - Equipment Delivery Expense Accumulated Depreciation - Truck Fill in the t-accounts for each situation and label each transaction as Deferrals/Prepaid or Accrual. Calculate the adjusted balance and use a Bal. post reference to show the ending balance of each account. Depreciation for the current year includes Equipment, $3,700. The Accumulated Depreciation - Equipment unadjusted balance as of December 31 is $7,000. Adjustment Type: Depreciation Expense - Equipment Accumulated Depreciation - Equipment Used office supplies of $290. The Office Supplies unadjusted balance on December 31 is $9,800. Adjustment Type: Supplies Expense Office Supplies Used office supplies of $290. The Office Supplies unadjusted balance on December 31 is $9,800. Adjustment Type: Supplies Expense Office Supplies Incurred interest expense of $200. Adjustment Type: Interest Expense Interest Payable Journalize the adjusting entry needed at December 31 for each situation. Use the Chart of Accounts to review account names! Completed services that were paid for six months earlier, $1,300 Date Accounts and Explanation Debit Credit Used prepaid insurance of $3,200 Date Accounts and Explanation Debit Credit Used prepaid insurance of $3,200 Date Accounts and Explanation Debit Credit Employees earned $1,900 in salaries that will be paid next month. Date Accounts and Explanation Debit Credit
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