The ledger accounts given below, with an identification number for each, are used by Screetch Company.

Instructions: Prepare appropriate adjusting entries for the year ended December 31, 2012, by replacing the appropriate identification number(s) in the debit and credit columns provided and the dollar amount in the adjoining column. Item 0 is given as an example.

Entry Information Debited Credited Amount

0. Interest of $300 is accrued on a note receivable at December 31 , 2012. 3    12 $300

1 . A customer paid Screetch $16,000 on December 1, 2012, for services to be rendered from December 1 through January 31, 2013. The receipt was credited to a liability account.

2. Screetch has two employees who each earn $110 per day. At December 31, four days' salaries have been earned but not paid

3. Screetch provided services to a customer in 2012 at a fee of $1 ,000. This fee has not yet been received or billed.

4. Screetch purchased equipment costing $28,000 on January 1, 2011. Monthly depreciation is $400.

5. Screetch borrowed $8,000 by signing a three-month, 6% interest, note payable on November 1, 2012.

6. Screetch paid $9,000 for a three-year insurance policy on July 1, 2012, debiting an asset account at that time.

7. Screetch started the year with no supplies%on hand. They purchased $4,000 in supplies during the year and have $1 ,800 on hand at December 31. Supplies were debited to an asset account when purchased.

8. Screetch purchased short-term investments on October 1, 2012. Interest of $200 per month has been earned but not received prior to December 31.

Chapter 12 Investments (Intermediate Accounting - Spiceland)

Jasper Company completed the following securities transactions during 2018:

March 1 Purchased 500 shares of Thomas Corporation common stock @ $20 per share plus a brokerage fee of $100. Jasper classified these shares as trading securities.

April 1 Bought 30,000 of the 100,000 outstanding shares of Worth Stores common stock for $300,000 (please pay close attention to the percentage of ownership).

June 25 Received a $1.20 per share dividend on the Thomas Corporation stock.

June 30 Worth Stores paid $20,000 in dividends to its stockholders.

October 1 Purchased 2,000 shares of Alpha Company for $15 per share plus a brokerage fee of $400. Jasper classified these shares as available-for-sale securities.

November 6 Sold the Thomas Corporation shares of $25 per share less a brokerage fee of $250.

December 31 Alpha shares are selling for $12 per share.

December 31 Worth Stores paid $50,000 in dividends and earned a net income of $200,000.

Prepare the necessary journal entries to record the above transactions including any year-end fair value adjustments.

List of Accounts:

Accumulated Other Comprehensive Loss
Allowance for Loss on Debt Investment
Bonds Payable
Cash
Call Option
Common Stock
Cost of Goods Sold
Debt Investments
Dividend Revenue
Dividend Receivable
Equity Investments
Fair Value Adjustment
Futures Contract
Gain on Sale of Investments
Gain on Settlement of Call Option
Gain on Settlement of Put Option
Interest Expense
Interest Receivable
Interest Revenue
Inventory
Investment Income
Loss on Impairment
Loss on Sale of Investments
Loss on Settlement of Call Option
Loss on Settlement of Put Option
No Entry
Notes Payable
Paid-in Capital in Excess of Par - Common Stock
Put Option
Recovery of Loss from Impairment
Retained Earnings
Sales Revenue
Swap Contract
Unrealized Holding Gain or Loss - Equity
Unrealized Holding Gain or Loss - Income

I would like some assistance with the bolded transactions only. Thank you!

Problem 3-8 Balance sheet; errors; missing amounts [LO3-2, 3-3]

The following incomplete balance sheet for the Sanderson Manufacturing Company was prepared by the company’s controller. As accounting manager for Sanderson, you are attempting to reconstruct and revise the balance sheet.

Additional information ($ in 000s):

Certain records that included the account balances for the patent and shareholders’ equity items were lost. However, the controller told you that a complete, preliminary balance sheet prepared before the records were lost showed a debt to equity ratio of 1.2. That is, total liabilities are 120% of total shareholders’ equity. Retained earnings at the beginning of the year was $8,000. Net income for 2018 was $2,550 and $600 in cash dividends were declared and paid to shareholders.

Management intends to sell the investments in the next six months.

Interest on both the note and the bonds is payable annually.

The note payable is due in annual installments of $2,000 each.

Deferred revenue will be recognized as revenue equally over the next two fiscal years.

The common stock represents 700,000 shares of no par stock authorized, 450,000 shares issued and outstanding.

Required:
Prepare a complete, corrected, classified balance sheet. (Amounts to be deducted should be indicated by a minus sign.)
  

Wember Company acquired a subsidiary company on December 31, 2012, and recorded the cost of the intangible assets it acquired as follows:

The patent is being amortized by the straight-line method over an expected life of 10 years with no residual value. Amortization has been recorded for the current year. The trade name was considered to have an indefinite life.

Because of the success of the subsidiary in the past, Wember has not previously considered any of the intangible assets to be impaired. However, in 2016, because of a current recession and technological changes in the subsidiary’s industry, Wember decides to review all of its intangible assets for impairment and record any adjustments at December 31, 2016.

Wember estimates that the fair value of the patent is $42,000. The company estimates the fair value of the trade name to be $90,000 but decides that it now has a limited life of 5 years. The subsidiary company, which qualifies as a reporting unit, has a book value of $700,000, including the goodwill of $150,000. Wember estimates that the fair value of the subsidiary company is $400,000, of which it allocates 80% to the identifiable assets and liabilities.

Required:

Question 5 Which of the following will result in the largest expense recorded for the year?

Select one:

A. $4,000 is paid in January for an asset with a useful life of five years.

B. $1,800 is paid in January for a two-year fire insurance policy.

C. $1,000 cash dividends are declared and paid.

D. $850 is paid to an attorney for legal services rendered during the current year.

Question 6 An asset purchased on January 1, 2015 for $60,000 that has an estimated life of 10 years will have a book value on December 31, 2020 of:

Select one:

A. $60,000.

B. $24,000.

C. $36,000.

D. $42,000.

Question 7 The United Shipping Co. borrowed $25,000 at 12% interest on March 1, 2018. The note is to be repaid, with interest, in six months. If United Shipping makes monthly adjusting entries, which of the following is included as part of the March 31 adjusting entry?

Select one:

A. Credit Interest Payable $250.

B. Credit Interest Expense $250.

C. Debit Prepaid Interest $250.

D. Debit Interest Receivable $250.

Question 8 As of January 31, Princess Company owes $500 to Butler Co. for equipment rented during January. If no adjustment is made for this item at January 31, how will Princess's financial statements be affected?

Select one:

A. Cash will be overstated at January 31.

B. Net income for January will be understated.

C. Owners' equity will be overstated.

D. The financial statements will be accurate since the $500 does not have to be paid yet.

Question 9 An engineering firm provided services on 12/31/2018. Payment is due in 30 days. An adjusting entry is required: Select one:

A. To record uncollected revenue.

B. To record unearned revenue.

C. To record accrued liability.

D. To record prepaid revenue.

Question 10 Which of the following accounting principles are applied to help achieve the goals of accrual accounting? Select one: A. Business entity concept and realization principle.

B. Realization principle and matching principle.

C. Matching principle and safety principle.

D. Cost principle and the accounting equation.

Manitoba Mini Homes Corp. has annual earnings of $24,500 in its unadjusted trial balance. The company prepares financial statements annually, with adjusting journal entries recorded at year-end. The following items have not yet been addressed for the fiscal period ended 31 December:

a. A 12-month, $2,880 insurance policy that commenced on 1 September was paid on 1 September and debited to prepaid insurance at that time. The prepaid insurance account already had a balance of $1,730 on 1 September in relation to the prior insurance coverage, which expired on 30 August.

b. The office supplies inventory account had a balance of $1,200 at the beginning of the year. Supplies costing $3,800 were purchased during the year and expensed as bought. There is an inventory of $1,600 physically on hand at the end of the year.

c. Manitoba completed a mini-home sale on the last day of the fiscal year but has not yet recorded the transaction. The mini-home was sold for $55,900, and the proceeds were to be paid in early January. The unit has a cost of $43,000 and was still in inventory on the books as of 31 December.

d. A service charge of $190, a deduction from the cash account per the bank statement for December, has not yet been recorded. Interest on outstanding loans for $460 was also taken out of the bank account in December but is not recorded.

e. A customer paid a $9,900 deposit for repairs in December. This amount was credited to revenue, but the work is not expected to be done until January.

f. A customer paid $6,480 in early November for one year’s rent on a mini-home, a rental arrangement effective on 1 November. The cash received was credited to revenue in November.

g. A customer paid $7,320 in early August for one year’s rent on a mini-home, a rental arrangement commencing on 1 August. The cash received was credited to unearned revenue in August. h. A customer who rents a mini-home did not pay her rent in November or December, although the company believes that the amount will be paid in January. Nothing has been recorded for November or December. Monthly rental is $400 on this unit.

Problem #2. Mr. Meteor started his own pharmaceutical firm to discover new drugs to make people’s lives better, Meteor Inc., on May 1, 2018. The trial balance at May 31 is as follows.

METEOR INC.

Trial Balance

May 31, 2018

In addition to those accounts listed on the trial balance, the chart of accounts for Meteor Inc. also contains the following accounts and account numbers: No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 631 Supplies Expense, No. 717 Depreciation Expense, No. 722 Insurance Expense, and No. 732 Utilities Expense.

Other data:

1. $900 of supplies have been used during the month.

2. Utilities expense incurred but not paid on May 31, 2018, $250.

3. The insurance policy is for 2 years.

4. $400 of the balance in the unearned service revenue account remains unearned at the end of the month.

5. May 31 is a Wednesday, and employees are paid on Fridays. Adrien Inc. has two employees, who are paid $920 each for a 5-day work week.

6. The office furniture has a 5-year life with no salvage value. It is being depreciated at $190 per month for 60 months.

7. Invoices representing $1,700 of services performed during the month have not been recorded as of May 31.

Instructions

(a) Prepare the adjusting entries for the month of May.

(b) Post the adjusting entries to the ledger accounts. Enter the totals from the trial balance as beginning account balances and place a check mark in the posting reference column.

(c) Prepare an adjusted trial balance at May 31, 2018.

9-4

On October 29, 2016, Lobo Co. began operations by purchasing razors for resale. Lobo uses the perpetual inventory method. The razors have a 90-day warranty that requires the company to replace any nonworking razor. When a razor is returned, the company discards it and mails a new one from Merchandise Inventory to the customer. The company's cost per new razor is $14 and its retail selling price is $90 in both 2016 and 2017. The manufacturer has advised the company to expect warranty costs to equal 9% of dollar sales. The following transactions and events occurred.

2016

2017

1.1 Prepare journal entries to record above transactions and adjustments for 2016.
  

• 1Record the sales revenue of 50 razors for $4,500 cash.

• 2Record the cost of goods sold for 50 razors.

• 3Record the estimated warranty expense at 9% of November sales.

• 4Record the replacement of 10 razors that were returned under the warranty.

• 5Record the sales revenue of 150 razors for $13,500 cash.

• 6Record the cost of goods sold for 150 razors.

• 7Record the replacement of 20 razors that were returned under the warranty.

• 8Record the estimated warranty expense at 9% of December sales.

• 1Record the sales revenue of 100 razors for $9,000 cash.

• 2Record the cost of goods sold for 100 razors.

• 3Record the replacement of 25 razors that were returned under the warranty.

• 4Record the adjusting entry for warranty expense for the month of January 2017.