Kretz corp prepares monthly financial statements and therefore adjusts its amoun
ID: 2492358 • Letter: K
Question
Kretz corp prepares monthly financial statements and therefore adjusts its amounts at the end of every month. The following information is available for March 2016.
A.Kretz corp takes out a 0 day 8% $15,000 not on march 1,2016 with interest and principle to be paid at maturity
B. asset account office supplies on hand as a balance of $1,280 on March 1, 2016. During the march Kretz adds $750 to the account for purchases during the period. A count of the supplies on hand at the end of march indicates a balance of $1,370
C.The companypurchased office equipment last year for $62,600 the equipment has an estimate useful life of six years and estimated salvage value of $5,000= 62,00-5000/6 years=$800.00 a mon / debit – increase exp/decrease net income & equity=800/ credit =decreased assets
D.The company’s plant operates seven days a week, with a daily payroll of 950 wages earners and paid every Sunday. The last day of the month is Thursday March 31.. 950*6=$5700 in wage / debit wage exp=$5700/ debit= salaries payable
E .The company rented In idle warehouse on a neighboring business on Feb 1, 2016 at a rate of 2500 per month. On the date Kretz corp credited rent collected in advance from 6 months’ rent received in advance
F. On march 2016 Kretz corp credited a liability account, customer deposits for $4,800 this sum represents an amount that a customer paid in advance and that Kretz will earn evenly over 4 a month period
G. Base on it income for the month , Krietz corp estimates that federal income taxes for march amount to $3,900.00
For each of the proceedings situations prepare in general journal from the appropriate adjusting entry to be recorded on March 31, 2016.
Explanation / Answer
General Journal ( Adjustment Entries for March)
Kretz Corp
No
Description
Debit
Credit
A
Interest Expense
(15000 * .08 *1/12)
100
Interest Payable
100
To record the interest expense for the month.
B
Supplies Expense
660
Office Supplies
660
To record the supplies consumed during month
C
Depreciation Expense
800
Asset
800
To record the depreciation for the month
D
Salaries and Wages Expense
3800
Salaries Payable (950 x 4)
3800
Top record the wages of 4 days at month end.
E
Rent Expense
5000
Advance Rent
5000
To record the rent expense for Feb and March
F
Customer Deposit
1200
Income
1200
To record the income for the month of March
G
Federal Income Tax
3900
Provision for Federal Income Tax
3900
To record the provision of federal income tax
No
Description
Debit
Credit
A
Interest Expense
(15000 * .08 *1/12)
100
Interest Payable
100
To record the interest expense for the month.
B
Supplies Expense
660
Office Supplies
660
To record the supplies consumed during month
C
Depreciation Expense
800
Asset
800
To record the depreciation for the month
D
Salaries and Wages Expense
3800
Salaries Payable (950 x 4)
3800
Top record the wages of 4 days at month end.
E
Rent Expense
5000
Advance Rent
5000
To record the rent expense for Feb and March
F
Customer Deposit
1200
Income
1200
To record the income for the month of March
G
Federal Income Tax
3900
Provision for Federal Income Tax
3900
To record the provision of federal income tax
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