1- Prepare the annual adjusting entries necessary on December 31. 2- What amount
ID: 2489087 • Letter: 1
Question
1- Prepare the annual adjusting entries necessary on December 31.
2- What amounts should be shown for each of the following on the income statement for the year?
The accounts listed below appeared in the December 31 trial balance of the Savard Theater Debit Credit Equipment Accumulated Depreciation-Equipment Notes Payable Admissions Revenue Advertising Expense Salaries and Wages Expense Interest Expense $ 199,360 64,480 89,600 382,130 14,570 59,720 1,394 Your answer is partially correct. Try agairn From the account balances listed above and the information given below, prepare the annual adjusting entries necessary on December 31. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,250.) (1) The equipment has an estimated life of 16 years and a salvage value of $23,840 at the end of that time. (Use straight-line method.) (2) The note payable is a 90-day note given to the bank October 20 and bearing interest at 8%. (Use 360 days for denominator.) (3) In December, 2,700 coupon admission books were sold at $30 each. They could be used for admission any time after January 1 (4) Advertising expense paid in advance and included in Advertising Expense $1,550 (5) Salaries and wages accrued but unpaid $5,100 No. Account Titles and Explanation Debit Credit (1) Equipment 10970Explanation / Answer
Details Amt $ 1 Equipment Cost 199,360 Lerss salvage value 23,840 Depreciable value 175,520 Useful life in years 16 Yearly depreciation rate by SL method= 10,970 Adjustment eynrty Date Account Title Dr $ Cr $ Dec 31. Accumulated Depreciation 10,970 Depreciation Expense 10,970 2 Note payable amount = 89,600 Days interest to be caiculated= Oct - 10 days Nov --30 days Dec -- 31 days Total 71 days Interest @8%=89600*8%*71/360= 1,414 Adjustment eynrty Date Account Title Dr $ Cr $ Dec 31. Interest Expense 1,414 Accrued Interest Payable 1,414 3 Value of 2700 coupons @$30= 81,000 Adjustment eynrty Date Account Title Dr $ Cr $ Dec 31. Unearned Revenue 81,000 Admission Revenue 81,000 ( assuming coupon revenue already included in admission revenue) 4 Adjustment eynrty Date Account Title Dr $ Cr $ Dec 31. Prepaid Advertisisng Expense 1,550 Advertisisng Expense 1,550 5 Adjustment eynrty Date Account Title Dr $ Cr $ Dec 31. Salaries & Wages Payable 5,100 Salaries & Wages Expense 5,100 Amounts to be shown in Income statement Accounts Amt $ Admissions Revenue 301,130 Depreciation Expense 10,970 Interest Expense 2,808 Advertisisng Expense 13,020 Salaries & Wages Expense 64,820
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