Question

In: Accounting

P3-45: Assessing Financial Statement Effects of Transactions and Adjustments. The following information related to December 31...

P3-45: Assessing Financial Statement Effects of Transactions and Adjustments.

The following information related to December 31 accounting adjustment for fulton fast print company. The firm’s fiscal year ends on December 31.

1. Weekly salaries for a five-day week total 3,600 payable on Fridays. December 31 of the current year is a Tuesday.

2. Fulton Fast Print has 20,000 of notes payable outstanding at December 31. Interest of $200 has accrued on these notes by December 31 but will not be paid until the notes mature next year.

3. During December, Fulton Fast Print provided $900 of printing services to clients who will be billed on January 2. The firm uses the fees receivable account to reflect amounts earned but not yet billed.

4. Starting December 1, all maintenance work on Fulton Fast Print’s equipment is handled by Richardson Repair Company under an agreement whereby Fulton Fast Print pays a fixed monthly charge of $400. Fulton Fast Print paid six months’ service charge of 2,400 cash in advance on December 1 and increased its Prepaid maintenance amount by 2,400.

5. The firm paid $900 cash on December 15 for a series of radio commercials to run during December and January. One-third of the commercials aired by December 31. The $900 payment was in its prepaid advertising account.

6. Starting December 16, Fulton Fast Print rented 800 square feet of storage space from a neighboring business. The monthly rent of $0.80 per square foot is due in advance on the first of each month. Nothing was paid in December to the January 1 payment.

7. Fulton Fast Print invested 5,000 cash in securities on December 1 and earned interest of $38 on these securities by December 31. No interest will be received until January.

8. Annual depreciation on the firm’s equipment is 2,175. No depreciation has been recorded during the year.

Required

Prepare Fulton Fast Print Company’s accounting adjustments required at December 31 using the financial statement effects template.

P3-46: Preparing Accounting Adjustments Refer to the information in P3-45. Prepare accounting adjustments required at December 31 using journal entries.

NOTE: Only P3-46 IS REQUIRED, but you needed the information from P3-45 to complete this problem

Solutions

Expert Solution


Related Solutions

Assessing Financial Statement Effects of Transactions and Adjustments The following information relates to December 31 accounting...
Assessing Financial Statement Effects of Transactions and Adjustments The following information relates to December 31 accounting adjustments for Fulton Fast Print Company. The firm’s fiscal year ends on December 31. 1. Weekly salaries for a five-day week total $3,600, payable on Fridays. December 31 of the current year is a Tuesday. 2. Fulton Fast Print has $20,000 of notes payable outstanding at December 31. Interest of $200 has accrued on these notes by December 31 but will not be paid...
Assessing Financial Statement Effects of Trading and Available-for-Sale Securities Use the financial statement effects template to...
Assessing Financial Statement Effects of Trading and Available-for-Sale Securities Use the financial statement effects template to record the following four transactions involving investments in marketable securities. Assume that these transactions occur in 2018. Purchased 6,000 common shares of Liu, Inc., at $12.25 cash per share. Received a cash dividend of $1.50 per common share from Liu. Year-end market price of Liu common stock is $11.25 per share. Sold all 6,000 common shares of Liu for $66,300. Use negative signs with...
Assessing Financial Statement Effects of Trading and Available-for-Sale Securities Use the financial statement effects template to...
Assessing Financial Statement Effects of Trading and Available-for-Sale Securities Use the financial statement effects template to record the following four transactions involving investments in marketable securities. Assume that these transactions occur in 2018. Purchased 6,000 common shares of Liu, Inc., at $12.25 cash per share. Received a cash dividend of $1.50 per common share from Liu. Year-end market price of Liu common stock is $11.25 per share. Sold all 6,000 common shares of Liu for $66,300. Use negative signs with...
Assessing Financial Statement Effects of Equity Method Securities Use the financial statement effects template to record...
Assessing Financial Statement Effects of Equity Method Securities Use the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method. a. Purchased 12,000 common shares of Bakersfield Co. at $10 per share; the shares represent 30% ownership in Bakersfield. b. Received a cash dividend of $1.50 per common share from Bakersfield. c. Bakersfield reported annual net income of $75,000. d. Sold all 12,000 common shares of Bakersfield for $128,500. Use...
The following information is given for Ribbons and Bows prior to adjustments on December 31, 2019....
The following information is given for Ribbons and Bows prior to adjustments on December 31, 2019. Ribbons and Bows prepares adjusting entries annually on December 31. a)Salaries of $5,000 are paid every Friday for a five-day workweek ending on Friday. December 31, 2019, is a Thursday. b)On October 1, 2019, Ribbons and Bows collected $10,000 to be earned evenly over the next five months and credited unearned revenue. c)Accrued service revenue on December 31 amounts to $1,400. d)On June 1,...
Illustrate the effects on the accounts and financial statements of the following related transactions of Bowen...
Illustrate the effects on the accounts and financial statements of the following related transactions of Bowen Inc. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. a. Purchased $400,000 of merchandise from Swanson Co. on account, terms 1/10, n/30. Statement of Cash Flows Balance Sheet Income Statement Assets = Liabilities + Stockholders' Equity + = + Statement of...
Analyzing and Reporting Financial Statement Effects of Bond Transactions Lundholm, Inc., reports financial statements each December...
Analyzing and Reporting Financial Statement Effects of Bond Transactions Lundholm, Inc., reports financial statements each December 31 and issues $600,000, 7%, 15-year bonds dated May 1, 2012, with interest payments on October 31 and April 30. Assuming the bonds are sold at par on May 1, 2012, complete the financial statement effects template to reflect the following events: (a) bond issuance, (b) the first semiannual interest payment, and (c) retirement of $200,000 of the bonds at 101 on November 1,...
Johnson company’s financial year ended on December 31, 2010. All the transactions related to the company’s...
Johnson company’s financial year ended on December 31, 2010. All the transactions related to the company’s uncollectible accounts are can be found below: January 15 Wrote of $440 account of Miller Company as uncollectible April 2nd Re-establish the account of Louisa Teller and record the collection of $1,050 as payment in full for her account which had been written off earlier July 31 Received 40% of the $700 balance owed by William John and wrote off the remainder as uncollectible...
Financial Statement Effects of Accounts Payable Transactions Petroni Company engages in the following sequence of transactions...
Financial Statement Effects of Accounts Payable Transactions Petroni Company engages in the following sequence of transactions every month: 1. Purchases $500 of inventory on credit. 2. Sells $500 of inventory for $640 on credit. 3. Pays other operating expenses of $125 in cash. 4. Collects $640 in cash from customers. 5. Pays supplier of inventory $500. a. Create a monthly income statement and statement of operating cash flow (direct method) for four consecutive months. Do not use negative signs with...
Analyzing Transactions Using the Financial Statement Effects Template Following are selected transactions of Mogg Company. Record...
Analyzing Transactions Using the Financial Statement Effects Template Following are selected transactions of Mogg Company. Record the effects of each using the financial statement effects template. Shareholders contribute $10,000 cash to the business in exchange for common stock. Employees earn $500 in wages that have not been paid at period-end. Inventory of $3,000 is purchased on credit. The inventory purchased in transaction 3 is sold for $4,500 on credit. The company collected the $4,500 owed to it per transaction 4....
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT