ACC 291T Wk 3 – Apply: Connect Homework (New)

QS 3-2 Computing accrual and cash income LO C1

In its first year of operations, Roma Company reports the following.

• Earned revenues of $54,000 ($46,000 cash received from customers).
• Incurred expenses of $30,000 ($23,400 cash paid toward them).
• Prepaid $9,000 cash for costs that will not be expensed until next year.

Compute the company’s first-year net income under both the cash basis and the accrual basis of accounting.

QS 3-5 Prepaid (deferred) expenses adjustments LO P1

For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31.

Step 1: Determine what the current account balance equals.

Step 2: Determine what the current account balance should equal.

Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.

Assume no other adjusting entries are made during the year.

QS 3-8 Accumulated depreciation adjustments LO P1

For each separate case below, follow the three-step process for adjusting the Accumulated Depreciation account at December 31.

Step 1: Determine what the current account balance equals.

Step 2: Determine what the current account balance should equal.

Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.

Assume no other adjusting entries are made during the year.

QS 3-10 Unearned (deferred) revenues adjustments LO P2

Record adjusting journal entries for each of the following for year ended December 31.

Assume no other adjusting entries are made during the year.

1. Unearned Rent Revenue.The Krug Company collected $12,600 rent in advance on November 1, debiting Cash and crediting Unearned Rent Revenue. The tenant was paying 12 months’ rent in advance and occupancy began November 1.
2. Unearned Services Revenue.The company charges $130 per insect treatment. A customer paid $520 on October 1 in advance for four treatments, which was recorded with a debit to Cash and a credit to Unearned Services Revenue. At year-end, the company has applied three treatments for the customer.
3. Unearned Rent Revenue.On September 1, a client paid the company $37,200 cash for six months of rent in advance (the client leased a building and took occupancy immediately). The company recorded the cash as Unearned Rent Revenue.

QS 3-14 Accrued revenues adjustments LO P4

Record adjusting journal entries for each of the following for year ended December 31.

Assume no other adjusting entries are made during the year.

1. Accounts Receivable. At year-end, the L. Cole Company has completed services of $23,000 for a client, but the client has not yet been billed for those services.
2. Interest Receivable.At year-end, the company has earned, but not yet recorded, $550 of interest earned from its investments in government bonds.
3. Accounts Receivable.A painting company collects fees when jobs are complete. The work for one customer, whose job was bid at $1,620, has been completed, but the customer has not yet been billed.

Required information

Use the following information for the Quick Study below.

[The following information applies to the questions displayed below.]

Nix’It Company’s ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix’It uses the perpetual inventory system).

A physical count of its July 31 year-end inventory discloses that the cost of the merchandise inventory still available is $43,400.

QS 5-9 Accounting for shrinkage-perpetual system LO P3

 Prepare the entry to record any inventory shrinkage.