Reference no: EM131105134
i. When supplies are purchased they are recorded as an expense. Calculations after an end of period stock-take revealed a closing stock (balance) of $5,000. There was an opening balance of $3,000 and during the period $8,800 of supplies were purchased.
Record the adjusting entry.
ii. At Kai Enterprises, salaries are paid fortnightly on Friday afternoon. The fortnightly salary bill is $40,000 for the ten-day working fortnight. This accounting period ends on the Wednesday evening in the week in which the salaries are not paid.
Record the adjusting entry.
iii. On January 1, 2009 the Jim's Sweets purchased a computer. The computer cost $5,000. It is expected to have a useful life of five years and a scrap or residual value of $1,000. The company calculates and records depreciation on a straight-line basis. Record the adjusting entry for the financial year ending 31/12/2010.
iv. Rent was paid on the first day of March. It is paid in advance for the ten months commencing on that day and recorded as an asset. Monthly rent is $12,000.
Record the adjusting entry for the financial year ending on June 30 for the tenant (person paying rent). v. Matthew C.A. is conducting the audit on Swan Productions Limited.
It is normal practice not to submit your account/bill/invoice until the audit is completed but by the end of the financial year 127 hours had been spent on the audit. The average hourly rate is $200. Record the adjusting entry for Matthew C.A.
vi. James pays his car insurance of $3,000 annually in early October. The insurance policy covers all the company's car fleet from 12.01 a.m. on October 1. Insurance is recorded as an expense when paid and the financial year ends on March 31 2011. Record the adjusting entry on March 31.
vii. TRC is involved in a law suit with a former employee. Legal fees incurred so far on their behalf but not yet billed to TRC are estimated at $300,000 at the end of the financial year. Record the adjusting entry for the Lawyers.
viii. Of the $40,000 unearned subscription revenue shown in the pre-adjusting trial balance, $7,500 has been earned this year. Record the adjusting entry.
ix. The Pay TV provider offered a special rate for pre-connection subscribers. If they paid their first 9 months' fees in advance, they would only have to pay $900 (for the entire 9 months' of pay TV).
The provider recorded these connection fees as "connection fee revenue" and 60 people signed up. At the end of the first financial year the provider had only been providing connections for 4 months. Record the adjusting entry for the provider.
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: Calculations after an end of period stock-take revealed a closing stock (balance) of $5,000. There was an opening balance of $3,000 and during the period $8,800 of supplies were purchased.
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