1. Recognition of concepts. Ron Carroll operates a small company that books entertainers for theaters, parties, conventions, and so forth. The company’s fiscal year ends on June 30. Consider the following items and classify each as either (1) prepaid expense, (2) unearned revenue, (3) accrued expense, (4) accrued revenue, or (5) none of the foregoing.
and so on...
2. Analysis of prepaid account balance. The following information relates to Action Sign Company for 20X2:
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3. Understanding the closing process. Examine the following list of accounts:
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4. Adjusting entries and financial statements. The following information pertains to Fixation Enterprises:
The company previously collected $1,500 as an advance payment for services to be rendered in the future. By the end of December, one third of this amount had been earned.
Fixation provided $2,500 of services to Artech Corporation; no billing had been made by December 31.
Salaries owed to employees at year-end amounted to $1,650.
The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period.
The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months’ rent of Fixation’s headquarters, beginning on November 1.
The company previously collected $1,500 as an advance payment for services to be rendered in the future. By the end of December, one third of this amount had been earned.
Fixation provided $2,500 of services to Artech Corporation; no billing had been made by December 31.
Salaries owed to employees at year-end amounted to $1,650.
The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period.
The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months’ rent of Fixation’s headquarters, beginning on November 1.
and so on...
5. Adjusting entries. You have been retained to examine the records of Kathy’s Day Care Center as of December 31, 20X3, the close of the current reporting period. In the course of your examination, you discover the following:
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6. Bank reconciliation and entries. The following information was taken from the accounting records of Palmetto Company for the month of January:
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7. Direct write-off method. Harrisburg Company, which began business in early 20X7, reported $40,000 of accounts receivable on the December 31, 20X7, balance sheet. Included in this amount was $550 for a sale made to Tom Mattingly in July. On January 4, 20X8, the company learned that Mattingly had filed for personal bankruptcy. Harrisburg uses the direct write-off method to account for uncollectibles
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8. Allowance method: estimation and balance sheet disclosure. The following pre-adjusted information for the Maverick Company is available on December 31:
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9. Direct write-off and allowance methods: matching approach. The December 31, 20X2, year-end trial balance of Targa Company revealed the following account information:
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10. Allowance method: analysis of receivables. At a January 20X2 meeting, the president of Sonic Sound directed the sales staff “to move some product this year.” The president noted that the credit evaluation department was being disbanded because it had restricted the company’s growth. Credit decisions would now be made by the sales staff.
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