1) On October 1 of Year 1, the company made a $50,000 cash loan to another company. The interest rate on the loan is 13%. No cash payments will be collected on the loan until September 30 of Year 2. Which ONE of the following would be included in the ADJUSTING journal entry necessary on December 31 with respect to this loan?

A) DEBIT to Interest Revenue for $6,500

B) CREDIT to Interest Revenue for $4,875

C) CREDIT to Interest Revenue for $1,625

D) CREDIT to Interest Revenue for $6,500

E) DEBIT to Interest Revenue for $4,875

F) DEBIT to Interest Revenue for $1,625

2) On June 1, the company paid $1,200 in advance for 12 months of rent, with the rental period beginning on June 1. This $1,200 was recorded as Rent Expense. [Yes, they did it wrong, but we have to work with what they did.] As of the end of the year, no entry has yet been made to adjust the amount initially (incorrectly) recorded. -- Which ONE of the following will be included in the ADJUSTING ENTRY necessary on December 31?

A) DEBIT to CASH for $700

B) CREDIT to PREPAID RENT for $500

C) DEBIT to RENT EXPENSE for $500

D) DEBIT to PREPAID RENT for $500

E) DEBIT to PREPAID RENT for $700

F) DEBIT to RENT EXPENSE for $700

On October 1 of Year 1 Lesikar Company paid $1,200 cash for an insurance policy that would provide protection for a one year term. Which of the following shows how the required adjustment on December 31, Year 1 will affect Lesikar’s ledger accounts?

1. Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019, the end of the current year, Pitman Company's accounting clerk prepared the following unadjusted trial balance:

   Pitman Company
   Unadjusted Trial Balance
   October 31, 2019
   	Debit Balances		Credit Balances
   Cash	3,610
   Accounts Receivable	32,760
   Prepaid Insurance	6,110
   Supplies	1,670
   Land	96,330
   Building	253,810
   Accumulated Depreciation—Building			117,710
   Equipment	115,760
   Accumulated Depreciation—Equipment			83,840
   Accounts Payable			10,270
   Unearned Rent			5,830
   Jan Pitman, Capital			268,800
   Jan Pitman, Drawing	12,770
   Fees Earned			277,610
   Salaries and Wages Expense	165,460
   Utilities Expense	36,370
   Advertising Expense	19,430
   Repairs Expense	14,710
   Miscellaneous Expense	5,270
   	764,060		764,060

   The data needed to determine year-end adjustments are as follows:

   Required:

   • Unexpired insurance at October 31, $4,090.
   • Supplies on hand at October 31, $500.
   • The systematic periodic transfer of the cost of a fixed asset to an expense account during its expected useful life.Depreciation of building for the year, $2,710.
   • Depreciation of equipment for the year, $2,350.
   • Unearned rent at October 31, $1,520.
   • Accrued salaries and wages at October 31, $2,650.
   • Fees earned but unbilled on October 31, $15,550.

   1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life.Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.

   a.	Accounts Payable Cash Insurance Expense Insurance Payable Prepaid Insurance
   	Accounts Payable Cash Insurance Expense Insurance Payable Prepaid Insurance Prepaid Receivable
   b.	Accounts Payable Cash Supplies Expense Supplies Payable Supplies
   	Accounts Payable Cash Supplies Expense Supplies Payable Supplies
   c.	Accounts Payable Accumulated Depreciation-Building Building Expense Building Depreciation Expense-Building Depreciation Payable-Building
   	Accounts Payable Accumulated Depreciation-Building Building Expense Building Depreciation Expense-Building
   d.	Accounts Payable Accumulated Depreciation-Equipment Depreciation Expense-Equipment Depreciation Payable-Equipment Equipment Expense Equipment
   	Accounts Payable Accumulated Depreciation-Equipment Depreciation Expense-Equipment Equipment Expense Equipment
   e.	Cash Prepaid Rent Rent Expense Rent Revenue Unearned Receivable Unearned Rent
   	Cash Prepaid Rent Rent Expense Rent Revenue Unearned Rent
   f.	Accounts Payable Cash Fees Earned Salaries and Wages Expense Salaries and Wages Payable
   	Accounts Payable Cash Fees Earned Salaries and Wages Expense Salaries and Wages Payable
   g.	Accounts Payable Accounts Receivable Cash Fees Earned Unearned Fees
   	Accounts Payable Accounts Receivable Cash Fees Earned Fees Payable Unearned Fees

   Feedback

   1. Journalize the adjusting entries using the following additional accounts, Salaries and Wages Payable, Rent Revenue, Insurance Expense, The portion of the cost of a fixed asset that is recorded as an expense each year of its useful life.Depreciation Expense—Building, Depreciation Expense—Equipment, and Supplies Expense.

   Pitman Company
   Adjusted Trial Balance
   October 31, 2019
   	Debit Balances	Credit Balances
   Accumulated Depreciation-Building Cash Fees Earned Rent Revenue Salaries and Wages Payable Supplies Payable Unearned Rent
   Accounts Payable Accounts Receivable Jan Pitman, Drawing Fees Earned Insurance Payable Rent Revenue Salaries and Wages Payable Supplies Revenue
   Advertising Expense Accumulated Depreciation-Building Fees Payable Insurance Expense Insurance Payable Miscellaneous Expense Prepaid Insurance Rent Revenue
   Accounts Payable Accumulated Depreciation-Building Accumulated Depreciation-Equipment Fees Earned Rent Revenue Salaries and Wages Payable Supplies Unearned Rent
   Accounts Payable Accumulated Depreciation-Equipment Fees Earned Land Salaries and Wages Receivable Unearned Rent
   Accounts Payable Building Fees Earned Fees Payable Insurance Payable Rent Revenue Salaries and Wages Payable Supplies Expense
   Accumulated Depreciation-Building Depreciation Expense-Building Fees Earned Miscellaneous Expense Repairs Expense Utilities Expense
   Accounts Payable Equipment Fees Earned Insurance Payable Rent Revenue Salaries and Wages Payable Supplies Expense Unearned Rent
   Accounts Payable Advertising Expense Accumulated Depreciation-Equipment Depreciation Expense-Equipment Fees Earned Rent Revenue
   Accounts Payable Accounts Receivable Accumulated Depreciation-Building Building Cash Equipment Fees Earned Land
   Accumulated Depreciation-Building Accumulated Depreciation-Equipment Building Cash Fees Earned Prepaid Insurance Rent Revenue Unearned Rent
   Advertising Expense Accounts Receivable Land Prepaid Insurance Rent Revenue Salaries and Wages Payable Supplies Unearned Rent
   Accounts Payable Accounts Receivable Accumulated Depreciation-Building Accumulated Depreciation-Equipment Building Equipment Fees Earned Land Jan Pitman, Capital
   Advertising Expense Fees Earned Jan Pitman, Drawing Rent Revenue Salaries and Wages Expense Utilities Expense
   Accounts Payable Accounts Receivable Accumulated Depreciation-Building Building Cash Fees Earned Prepaid Insurance Salaries and Wages Payable Unearned Rent
   Accumulated Depreciation-Equipment Building Equipment Land Rent Revenue Salaries and Wages Expense Supplies Expense Unearned Rent
   Accounts Receivable Building Jan Pitman, Capital Land Salaries and Wages Expense Salaries and Wages Payable
   Building Jan Pitman, Capital Land Salaries and Wages Payable Unearned Rent Utilities Expense
   Advertising Expense Building Jan Pitman, Capital Salaries and Wages Payable Unearned Rent Utilities Expense
   Advertising Expense Jan Pitman, Capital Land Repairs Expense Salaries and Wages Payable Unearned Rent
   Accumulated Depreciation-Building Depreciation Expense-Building Equipment Jan Pitman, Capital Salaries and Wages Payable Unearned Rent
   Accumulated Depreciation-Equipment Depreciation Expense-Equipment Equipment Jan Pitman, Capital Salaries and Wages Payable Unearned Rent
   Accounts Receivable Insurance Expense Jan Pitman, Capital Land Salaries and Wages Payable Unearned Rent
   Accumulated Depreciation Expense-Building Accumulated Depreciation Expense-Equipment Land Prepaid Insurance Salaries and Wages Payable Supplies Supplies Expense Utilities Expense
   Accumulated Depreciation Expense-Building Accumulated Depreciation Expense-Equipment Land Miscellaneous Expense Prepaid Insurance Salaries and Wages Payable Supplies Utilities Expense

On October 1, 2018, the Allegheny Corporation purchased machinery for $191,000. The estimated service life of the machinery is 10 years and the estimated residual value is $4,000. The machine is expected to produce 340,000 units during its life.

Required:
Calculate depreciation for 2018 and 2019 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service.

1. Straight line.
2. Sum-of-the-years’-digits.
3. Double-declining balance.
4. One hundred fifty percent declining balance.
5. Units of production (units produced in 2018, 17,000; units produced in 2019, 32,000).

On October 1, 2018, the Allegheny Corporation purchased machinery for $245,000. The estimated service life of the machinery is 10 years and the estimated residual value is $3,000. The machine is expected to produce 440,000 units during its life. Required: Calculate depreciation for 2018 and 2019 using each of the following methods. Partial-year depreciation is calculated based on the number of months the asset is in service. 1. Straight line. 2. Sum-of-the-years’-digits. 3. Double-declining balance. 4. One hundred fifty percent declining balance. 5. Units of production (units produced in 2018, 22,000; units produced in 2019, 37,000).

ABC Company Inc. is a new company that began operations on October 5th, 2019. The following are the only events that have occurred since the company’s inception.

REQUIRED:

Prepare the Journal Entries, T accounts, Trial Balance as of 12-31-19, Balance Sheet as of 12-31-19 and the Income Statement for the year ended December 31st for ABC Company Inc. Lastly, please prepare the closing entries and the post closing trial balance.

10-05-19    John Smith, Sole Shareholder of ABC Inc, contributed $80,000 to the company.

10-18-19     ABC Company Inc. paid rent for October 2019 through March of 2020 in the amount of $1200 per month

11-01-19     ABC Company Inc. bought a tractor for $78,000 They made a $15,000 down payment and are financing the rest.

11-08-19     ABC Company Inc. performed $70,000 of Landscaping services and was paid $45,000 immediately and expects to receive the balance at some point in the next 90 days.

11-14-19    ABC Company Inc. received a payment of $80,000 from XYZ Company for work that ABC Company will do over the next few months.

11-16-19     ABC Company Inc. bought office supplies for $1000 and paid Cash.

12-02 19    ABC Company Inc. paid salaries in the amount of $2500 for the pay period of November 15^th to November 30th

12-07-19     ABC Company Inc. received a payment for the work they performed on 11-08-19 in the amount of $5000

12-14-19     ABC Company Inc. made a $12,000 payment on the tractor that they purchased on 11-18-19 ($1,427 of the payment is for interest)

12-17 19     ABC Company Inc. paid salaries in the amount of $2500 for the pay period of December 1st to December 15^th.

12-18-19     ABC Company Inc. bought office supplies for $1200 on account.

12-20-19     ABC Company Inc. paid a utility bill for $600 and made a $150 insurance payment

12-22-19    John Smith, Sole Shareholder of ABC Inc, withdrew $3,000 from ABC Company.

12-23-19    ABC Company did 20% of the work they were paid for on 11-14-19

12-31-19     Prepare the adjusting journal entry to accrue for salaries for the pay period of December 16^th to December 31^st in the amount of $2500

12-31-19     Prepare the adjusting journal entry that reflects that we have $900 of Office Supplies remaining as of 12-31-19

12-31-19     Prepare the adjusting journal entry to record depreciation on the tractor that was purchased on 11-01-2019 (Use Straight Line Depreciation, 5 year life, and $24,000 salvage value)

12-31-19     Prepare the adjusting journal entry to record the adjustment needed for prepaid rent and rent expense.

12-31-19     Prepare the adjusting journal entry to record $127 of interest earned on the company checking account.

12-31-19     Prepare the adjusting journal entry to record $684 of accrued interest owed on the tractor that was purchased on 11-18-19

Al’s Car Wash purchased a piece of equipment on October 1, 2018, for $27,000. The equipment has a useful life of four years and a residual value of $2,000. Compute the depreciation for 2020, accumulated depreciation at the end of 2020, and book value at the end of 2020 using the straight-line method.

You are auditing payroll for the Harbor Creek Technologies company for the year ended October​ 31, 2016. Included next are amounts from the​ client's trial​ balance, along with comparative audited information for the prior year. LOADING...​(Click the icon to view the amounts from the trial​ balance.) LOADING...​(Click the icon to view the additional​ information.) Requirements a. Use the final balances for the prior year and the information in items 1 through 5 to develop an expected value for each​ account, except sales.​ (Round to the nearest whole​ dollar.) b. Calculate the difference between your expectation and the​ client's recorded amount as a percentage using the formula​ (expected value-recorded​ amount)/expected value. ​(Round to the nearest hundredth​ percent, X.XX%.) ​(Note 1: When computing the expected value of factory hourly​ payroll, you must take into consideration both the 7​% wage increase and the 11​% increase in the number of units produced and sold. Note​ 2: Use the increase in the ​10/31/2016 preliminary sales balance over the ​10/31/2015 audited sales balance to determine the expected value for sales commissions on ​10/31/2016​.) Requirement a. (A) (B) Preliminary Balance Expected Value 10/31/2016 10/31/2016 Executive salaries 630,599 Factory hourly payroll (see Note 1) 11,697,055 Factory supervisors' salaries 770,600 Office salaries 2,905,881 Sales commissions (see Note 2) 2,660,499 Enter any number in the edit fields and then click Check Answer

Audited Balance

Preliminary Balance

10/31/2015

10/31/2016

Sales*

$50,064,758

$56,573,177

Executive salaries

501,948

630,599

Factory hourly payroll

10,210,396

11,697,055

Factory supervisors' salaries

770,600

770,600

Office salaries

2,239,582

2,905,881

Sales commissions

2,018,149

2,660,499

*Sales have increased 13% over prior year. 2% percent of that is due to an increase in the average selling price. The remaining 11% is attributed to an increase in the number of units sold.

You have obtained the following information to help you perform preliminary analytical procedures for the payroll account balances.

During October 1962 the United States and the Soviet Union engaged in a stand off over the Soviet Union’s attempted deployment of nuclear missiles to Cuba. We will model part of the crisis dynamics as they looked on October 22, 1962 when President Kennedy announced the naval blockade of Cuba stating that Soviet ships carrying nuclear missile equipment would be turned back if attempting to enter Cuba. Consider this a sequential move game where the first mover Premier Krushchev can choose to retract (R) the ships or order them to challenge (C) the blockade. If Krushchev retracts, the game ends and it will be perceived as a political failure for Krushchev and a win for Kennedy with payoff 2 of (−1, 1), meaning a payoff of −1 to Krushchev and 1 to Kennedy. If Krushchev challenges the blockade, Kennedy will observe the challenge and now has an option to enforce (E) the blockade or to fold (F), the latter meaning letting the ships proceed to Cuba. If Kennedy folds the game ends, and Krushchev will deploy nuclear missiles to Cuba and achieve an improved strategic position, resulting in payoffs of (5, −5). If Kennedy enforces the blockade, the crisis will escalate with the distinct possibility of nuclear war ensuing. We will assign payoffs (−100, −100) to the act of enforcing the blockade.

1. Draw the extensive form game between Krushchev and Kennedy.

2. What are the pure strategy Nash equilibria of the game? Explain.

3. What is the subgame perfect Nash equilibrium of the game? Explain.

4. In reality, Kruschev retracted the ships. The following is an open ended question: In order to understand this action, how is it in your mind best understood given the previous analysis? Is the equilibrium concept not appropriate? Would you consider changes in the game?