ACC 291 Week 4 Apply: Connect Assignment

ACC 291 Week 4 Apply: Connect Assignment
1

a.-b. Merchandise Inventory, before adjustment, has a balance of $6,600. The newly counted inventory balance is $7,100.

Unearned Seminar Fees has a balance of $5,100, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019.
Prepaid Insurance has a balance of $6,600 for six months’ insurance paid in advance on May 1, 2019.
Store equipment costing $12,890 was purchased on March 31, 2019. It has a salvage value of $410 and a useful life of four years.
Employees have earned $160 that has not been paid at June 30, 2019.
The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $4.80; FUTA, $0.96; Medicare, $2.32; and social security, $9.92.
Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were $1,100,000.
Prepaid Rent has a balance of $5,250 for six months’ rent paid in advance on March 1, 2019.
The Supplies account in the general ledger has a balance of $310. A count of supplies on hand at June 30, 2019, indicated $105 of supplies remain.
The company borrowed $13,700 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 12 percent.
Required:

Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end.

Analyze:

After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account?

2

On July 1, 2019, Tim Stein established his own accounting practice. Selected transactions for the first few days of July follow.

DATE    TRANSACTIONS
July    1    Signed a lease for an office and issued Check 101 for $13,950 to pay the rent in advance for six months.
1    Borrowed money from Second National Bank by issuing a four-month, 6 percent note for $31,200; received $30,576 because the bank deducted the interest in advance.
1    Signed an agreement with Carter Corp. to provide accounting and tax services for one year at $6,500 per month; received the entire fee of $78,000 in advance.
1    Purchased office equipment for $17,200 from Office Outfitters; issued a two-month, 9 percent note in payment. The equipment is estimated to have a useful life of four years and a $1,840 salvage value. The equipment will be depreciated using the straight-line method.
1    Purchased a one-year insurance policy and issued Check 102 for $1,680 to pay the entire premium.
3    Purchased office furniture for $22,120 from Furniture Warehouse; issued Check 103 for $15,520 and agreed to pay the balance in 60 days. The equipment has an estimated useful life of six years and a $1,600 salvage value. The office furniture will be depreciated using the straight-line method.
5    Purchased office supplies for $1,910 with Check 104. Assume $850 of supplies are on hand July 31, 2019.
Required:

Record the transactions in the general journal. Assume that the firm initially records prepaid expenses as assets and unearned income as a liability for the year 2019.
Record the adjusting journal entries that must be made on July 31, 2019.
Analyze:

What balance should be reflected in Unearned Accounting Fees at July 31, 2019?

3

The Green Thumb Gardener is a retail store that sells plants, soil, and decorative pots. On December 31, 2019, the firm’s general ledger contained the accounts and balances that appear below.

ADJUSTMENTS

a.–b. Merchandise inventory on December 31, 2019, is $11,621.

During 2019, the firm had net credit sales of $28,000; the firm estimates that 0.7 percent of these sales will result in uncollectible accounts.
On December 31, 2019, an inventory of the supplies showed that items costing $240 were on hand.
On October 1, 2019, the firm signed a six-month advertising contract for $900 with a local newspaper and paid the full amount in advance.
On January 2, 2018, the firm purchased store equipment for $7,680. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $530.
On January 2, 2018, the firm purchased office equipment for $1,180. At that time, the equipment was estimated to have a useful life of five years and a salvage value of $130.
On December 31, 2019, the firm owed salaries of $1,760 that will not be paid until 2020.
On December 31, 2019, the firm owed the employer’s social security tax (assume 6.2 percent) and Medicare tax (assume 1.45 percent) on the entire $1,760 of accrued wages.
On December 31, 2019, the firm owed federal unemployment tax (assume 0.6 percent) and state unemployment tax (assume 5.4 percent) on the entire $1,760 of accrued wages.
Required:

Prepare the Trial Balance section of a 10-column worksheet. The worksheet covers the year ended December 31, 2019.
Enter the adjustments above in the Adjustments section of the worksheet.
Complete the worksheet.
Analyze:

By what amount were the assets of the business affected by adjustments?