Question

Prepare the fiscal 2011 adjusting journal entry for each of the items of additional information listed below the trial balance; indicate “NONE” if no adjustment is needed.

Cash 39,000

Accounts Receivable 40,000

Allowance for Doubtful Accounts 2,000

Note Receivable 10,000

Inventory 33,000

Office Supplies 4,000

Prepaid Advertising 11,000

Prepaid Insurance 5,000

Machinery 120,000

Accumulated Depreciation 14,000

Accounts Payable 24,000

Unearned Service Revenues 13,000

Unearned Consulting Revenues 14,000

Common Stock 50,000

Retained Earnings 138,000

Sales Revenue 245,000

Cost of Goods Sold 105,000

Salaries and Wages Expense 75,000

Utilities Expense 22,000

Rent Expense 36,000

Totals 500,000 500,000

1. CC estimates that $3,000 of its accounts receivables will probably not be collected.

2. The note is a 120-day, 6% loan that CC made on October 2, 2018.

3. The cost of the office supplies on hand at year-end was $1,900.

4. The advertising costs paid in 2011 include $4,400 for ads that will run during fiscal 2012.

5. Of the insurance premiums paid during 2011, $1,800 is for fiscal 2012 coverage.

6. Received in December of 2011, a $1,200 bill for January 2012 phone service remains unpaid.

7. Machinery is depreciated at a 5% rate with no salvage value.

8. Of the amounts service customers paid in advance, $2,000 is for performance obligations that CC expects to satisfy in fiscal 2012.

9. CC requires full payment in advance from all of its clients that contract for consulting, and CC has not yet satisfied $6,000 of performance obligations under these contracts.

10. A warehouse owner has notified CC that it has accepted the offer CC made to buy the structure for $125,000, so the two parties are negotiating the payment terms

Answer 1