Reference no: EM132638933

Question 1: Suppose your firm loaned an employee $1,000 at 7% (interest rates are always assumed to be year) on July 1. On December 31, the firm is preparing its year-end financial statements. What adjustment would the firm need to make to properly account for any interest revenue that had been earned prior to year end?

Question 2: Suppose ABC Company pays its employees a total of $56,000 on the 15th each month for work done the previous month. ABC generally records salary expense when the employees are paid. If the ABC fiscal year end is June 30, 2010, does any salary expense need to be accrued at year end? If so, how much?

Question 3: Living time magazine collected $300,000 for 12-month subscriptions before it published its first issue in June 2010. How much revenue should the magazine company recognize for the fiscal year ended December 31, 2010? Explain what it means to recognize revenue in this situation.

Question 4: Suppose your firm loaned an employee $1,000 at 7% (interest rates are always assumed to be year) on July 1. On December 31, the firm is preparing its year-end financial statements. What adjustment would the firm need to make to properly account for any interest revenue that had been earned prior to year end?

Question 5: Tango Company purchased a computer on July 1, 2011, for $6,500. It is expected to last for five years and have a residual value of $500 at the end of the fifth year. How much depreciation expense would appear on the tango December 31, 2011, income statement? What is the book value of the computer at the end of 2012?