Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have been given the unadjusted trial balance for the Bogie & Bacall Company (B&B) as of 12/31/2018. B&B prepares financial statements annually. On the

You have been given the unadjusted trial balance for the Bogie & Bacall Company (B&B) as of 12/31/2018. B&B prepares financial statements annually.

On the designated worksheet, prepare in journal entry form the adjusting journal entries for the following items. Letter the journal entries to correspond to the below information. (Round all numbers to the nearest dollar)

On June 1, 2018 B&B paid Lorre Advertising $48,000 for two years of advertising services. They debited Prepaid Advertising at the time. Equal services are provided in year 1 and year 2 of the contract.

$4,250 of store supplies were purchased during the year and the asset Store Supplies was increased. $2,150 of these supplies were used during the year.

Cost of Goods Sold for one Merchandise transaction was erroneously recorded as a debit to Cost of Sales and a credit to Accounts Payable of $7,070. It should have been recorded as $7,700, with a credit to the proper account.

On October 1, 2018, B&B made a loan to Greenstreet & Co., evidenced by a 9-month note receivable at an annual interest rate of 4%. Principal and interest will be paid at the end of the 9-months. The note was recorded in Notes Receivable and is the only note outstanding.

Sales salaries of $6,200 and office salaries of $4,800 were earned and remained unpaid at 12/31/18.

No depreciation expense was recorded for the year on the Office Equipment. The equipment was acquired on April 1 of the year just ended, it has a $5,000 salvage value, and is to be depreciated over a 5 year life under the double-declining balance method.

On November 1, 2018, B&B collected $24,000 for consulting services to be performed from November 1, 2018 to February 28, 2019. The company credited the Unearned Consulting Revenue account when the cash was received.

Based on past experience, B&B calculates bad debt expense at 1.5% of net sales (excluding Consulting Revenue) for the year.

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

Auditing Text And Cases

Authors: W. Robert Knechel, Knechel

1st Edition

0538819340, 9780538819343

More Books

Students also viewed these Accounting questions