Help with adjusting entries?
I just want to check my answers against someone who can help…. If you can’t do all of these it’s ok, just try as many as possible… thanks a lot!
1) the provision for doubtful accounts receivable is recorded by providing a charge to Bad Debt Expense in an amount equal to 2% of net sales.
2) an inventory count on office supplies revealed that $830 of supplies is on hand at the end of the year.
3) A physical inventory on January 2, 2008 results in a total dollar value assigned to ending inventory at lower cost or market of $ 539,930.
4) The insurance premium outstanding on Jan 1 2007 covers the period Jan 1 through August 31, 2007. The insurance premium of $8460 recorded in August covers the period of September 1, 2007 through August 31, 2008. The company esimates that 75% of premiums are attributable to general activity and 25 % to selling activity.
5) the payroll summary for the employees who are paid biweekly shows the following at the year end:
Delivery and Warehouse wages 5600
FICA tax payable 375
Fed Withholding tax 1036
State withholding tax 218
Net Pay $3971
6) The employers FICA tax ($375) must be accrued; no state or fed tax is incurred during the 4th qrtr because all wages and salaries earned during the last qrtr exceed the maximum subject to unemployment tax.
7) interest accrued has 8% on mortgage notes payable since Jul 1, 2007. The next six month interest payment at 9 % on the bonds is due on March 1, 2001 and matures March 1, 2011. (USe straight line) ( there are two entries for this)
the interest accrued on the year end on notes receivable is composed of the following:
Plateville Plumbers 12%, 6 months, due end of March 1350
Bilder Constr., 14%. 6 months, due June 14, 2008 295
Bevs Build, 12%, 6 months due June 26, 2008 23
Total 1668
The interest accrued at the year end of 2007 on the note payable of 15000 at 8% is $1800. Interest is payable on January 2,2008 ( the note is due in 2008)
9) A warehouse lease payment of $10,890 is made on Sept 1, 2007 for rent through Feb end, 2008. ( Prepaid rent is for advance lease payments on the warehouse)
10) $530 is owed to Company A and $279 is owed to Company B for utility services provided during December 2007.
1.
Dr. bad debt expense (with 2% of sales, you havent mentioned the mount)
Cr. Provision for doubtful debts
3. (in case of periodic inventory system)
Dr. inventory 539,930
Cr. Trading account / manufacturing account 539,930
4.
Dr. Prepaid insurance 5,640
Dr. Insurance expense (admin expenses) 2,115
Dr. Insurance expense (selling expense) 705
Cr. Insurance premium 8,460
5.
Dr. Salaries and wages expense 5,600
Cr. FICA tax withheld 375
Cr. FED withholding tax 1036
Cr. State withholding tax 218
Cr. Bank / cash 3,971
6.
Employers FICA tax 375
Employers FICA tax accrued 375
Now I am tired and cant proceed sorry!!!
