ACC 290 Week 4 Practice: Connect Practice Assignment

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ACC 290 Week 4 Practice: Connect Practice Assignment
ACC 290 Week 4 Practice: Connect Practice Assignment
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ACC 290 Week 4 Practice: Connect Practice Assignment

Complete the Week 4 Practice in Connect.

Note: You have unlimited attempts available to complete practice assignments.

1

  1. On June 1, 2019, Cain Company, a new firm, paid $8,400 rent in advance for a seven-month period. The $8,400 was debited to thePrepaid Rent
  2. On June 1, 2019, the firm bought supplies for $10,250. The $10,250 was debited to the Supplies An inventory of supplies at the end of June showed that items costing $5,960 were on hand.

  1. On June 1, 2019, the firm bought equipment costing $72,900. The equipment has an expected useful life of 9 years and no salvage value. The firm will use the straight-line method of depreciation.

2

The completed worksheet for Cantu Corporation as of December 31, 2019, after the company had completed the first month of operation, appears below.

CANTU CORPORATION

Worksheet

Month Ended December 31, 2019

Trial BalanceAdjustmentsAdjusted Trial BalanceIncome StatementBalance Sheet
Account NameDebitCreditDebitCreditDebitCreditDebitCreditDebitCredit
Cash39,10039,10039,100
Accounts Receivable6,5006,5006,500
Supplies6,0503,5006,0502,550
Prepaid Advertising10,2001,70010,2008,500
Equipment42,50042,50042,500
Accumulated Depreciation—Equipment850850850
Accounts Payable6,5006,5006,500
Selena Cantu, Capital54,50054,50054,500
Selena Cantu, Drawing4,1004,1004,100
Fees Income57,75057,75057,750
Supplies Expense3,5003,5003,500
Advertising Expense1,7001,7001,700
Depreciation Expense-Equipment850850850
Salaries Expense8,9008,9008,900
Utilities Expense1,4001,4001,400
Totals118,750118,7506,0506,050119,600119,60016,35057,750103,25061,850
Net Income41,40041,400
57,75057,750103,250103,250

Required:

  1. Prepare an income statement.
  2. Prepare a statement of owner’s equity. The owner made no additional investments during the month.
  3. Prepare a balance sheet.

Analyze:

If the adjustment to Prepaid Advertising had been $3,400 instead of $1,700, what net income would have resulted?

 

3

Assume that a firm reports net income of $45,000 prior to making adjusting entries for the following items: expired rent, $3,500; depreciation expense, $4,100; and supplies used, $1,800.

Assume that the required adjusting entries have not been made. What effect do these errors have on the reported net income?

 

4

Desoto Company must make three adjusting entries on December 31, 2019.

  1. Supplies used, $5,500 (supplies totaling $9,000 were purchased on December 1, 2019, and debited to the Suppliesaccount).
  2. Expired insurance, $4,100; on December 1, 2019, the firm paid $24,600 for six months’ insurance coverage in advance and debitedPrepaid Insurancefor this amount.
  3. Depreciation expense for equipment, $2,900.

Required:

Prepare the journal entries for these adjustments and post the entries to the general ledger accounts

 

5

The adjusted trial balance of University Book Store as of November 30, 2019, after the firm’s first month of operations, appears below.

Appropriate adjustments have been made for the following items:

  1. Supplies used during the month, $2,900.
  2. Expired rent for the month, $3,500.
  3. Depreciation expense for the month, $950.

UNIVERSITY BOOK STORE

Adjusted Trial Balance

November 30, 2019

Account NameDebitCredit
Cash$23,075
Accounts Receivable3,812
Supplies4,600
Prepaid Rent21,000
Equipment27,500
Accumulated Depreciation-Equipment$950
Accounts Payable9,000
Ruby Darbandi, Capital41,837
Ruby Darbandi, Drawing4,000
Fees Income48,550
Depreciation Expense-Equipment950
Rent Expense3,500
Salaries Expense8,500
Supplies Expense2,900
Utilities Expense500
Totals$100,337$100,337

Required:

  1. Record the adjusting entries in the Adjustments columns.
  2. Complete the Trial Balance columns of the worksheet prior to making the adjusting entries.

Analyze:

What was the balance of Prepaid Rent prior to the adjusting entry for expired rent?

 

6

On January 31, 2019, the general ledger of Palmer Company showed the following account balances.

ACCOUNTS
Cash31,500
Accounts Receivable11,250
Supplies4,500
Prepaid Insurance4,100
Equipment45,750
Accum. Depr.—Equip.0
Accounts Payable8,350
Sadie Palmer, Capital40,975
Fees Income58,500
Depreciation Exp.—Equip.0
Insurance Expense0
Rent Expense5,300
Salaries Expense5,425
Supplies Expense0

Additional information:

  1. Supplies used during January totaled $2,850.
  2. Expired insurance totaled $1,025.
  3. Depreciation expense for the month was $925.

Complete the worksheet through the Adjusted Trial Balance section. Assume that every account has the normal debit or credit balance. The worksheet covers the month of January.