Adjusting Entries P3-5 (Adjusting Entries) Savard Theater. The accounts listed b
ID: 2330883 • Letter: A
Question
Adjusting Entries P3-5 (Adjusting Entries) Savard Theater. The accounts listed below appeared in the December 31 trial balance of the Debit $192,000 Credit Equipment Accumulated Depreciation-Equipment Notes Payable Admissions Revenue Advertising Expense Salaries Expense Interest Expense $ 60,000 90,000 380,000 13,680 57,600 1.400 Instructions (a) From the account balances listed above and the information given below, justing entries necessary on December 31. (Omit explanations.) (1) The equipment has an estimated life of 16 years and a salvage value of $24,000 at the end of prepare the annual ad- (2) (3) (4) Advertising expense paid in advance and included in Advertising Expense $1,100. that time. (Use straight-line method.) The note payable is a 90-day note given to the bank October 20 and bearing interest at 8%, (Use 360 days for denominator.) In December 2,000 coupon admission books were sold at $30 each. They could be used for admission any time after January 1. (5) Salaries accrued but unpaid $4,700. (b) What amounts should be shown for each of the following on the income statement for the year? () Interest expense. (3) Advertising expense. (4) Salaries expense (2) Admissions revenue.Explanation / Answer
Answer
Adjustment entry no.
Accounts title
Debit
Credit
Working
1
Depreciation Expense - Equipment
$ 10,500.00
[Cost - Salvage value) / Life
Accumulated Depreciation - Equipment
$ 10,500.00
[ (192000 - 24000) /16 years]
2
Interest Expense
$ 1,440.00
[90000 x 8% x 72 days/360 days]
Interest payable
$ 1,440.00
Oct 20 to Dec 31 = 72 days
3
Cash
$ 60,000.00
[2000 x $ 30]
Admission revenue
$ 60,000.00
4
Prepaid Advertising Expense
$ 1,100.00
Advertising Expense
$ 1,100.00
5
Salaries Expenses
$ 4,700.00
Salaries Payable
$ 4,700.00
Interest Expense
Advertising Expense
Admission Revenue
Salaries Expense
Balances given
$ 1,400.00
$ 13,680.00
$ 380,000.00
$ 57,600.00
Adjustment entry no. 1
Adjustment entry no. 2
$ 1,440.00
Adjustment entry no. 3
$ 60,000.00
Adjustment entry no. 4
$ (1,100.00)
Adjustment entry no. 5
$ 4,700.00
Amount to be shown on Income Statement = ANSWER
$ 2,840.00
$ 12,580.00
$ 440,000.00
$ 62,300.00
Adjustment entry no.
Accounts title
Debit
Credit
Working
1
Depreciation Expense - Equipment
$ 10,500.00
[Cost - Salvage value) / Life
Accumulated Depreciation - Equipment
$ 10,500.00
[ (192000 - 24000) /16 years]
2
Interest Expense
$ 1,440.00
[90000 x 8% x 72 days/360 days]
Interest payable
$ 1,440.00
Oct 20 to Dec 31 = 72 days
3
Cash
$ 60,000.00
[2000 x $ 30]
Admission revenue
$ 60,000.00
4
Prepaid Advertising Expense
$ 1,100.00
Advertising Expense
$ 1,100.00
5
Salaries Expenses
$ 4,700.00
Salaries Payable
$ 4,700.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.