Problem 3-3A (Algo) Record adjusting entries (LO3-3) The information necessary for preparing the 2024 year-end adjusting entries for Rogers Advertising Agency appears below. Rogers's fiscal year-end is December 31. 1. On July 1, 2024, Rogers received $5,400 from a customer for advertising services to be given evenly over the next 10 months. Rogers credited Deferred Revenue on July 1. 2. At the end of the year, income taxes owed are $6,400. 3. On May 1, 2024, the company paid $4,080 for a two-year fire and liability insurance policy. The company debited Prepaid Insurance on May 1. 4. On September 1, 2024, the company borrowed $14,000 from a local bank and signed a note. Principal and interest at 12% will be paid on August 31, 2025. 5. At year-end there is a $2,400 debit balance in the Supplies (asset) account. Only $940 of supplies remains on hand at the end of the year. Required: Record the necessary adjusting entries on December 31, 2024. No prior adjustments have been made during 2024. (Do not round intermediate calculations. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
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Rogers received $5,400 for services to be provided over 10 months, starting from July 1, 2024. By December 31, 2024, 6 months of service would have been provided. Calculate the revenue earned: \[ \frac{6}{10} \times \$5,400 = \$3,240 \] Adjust the Deferred Revenue Show more…
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Akash M.
Preparing Adjusting Entries Prepare adjusting journal entries for the year ended December 31 for each separate situation. Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Prepaid Rent; Equipment; Accumulated Depreciation-Equipment; Wages Payable; Unearned Revenue; Services Revenue; Wages Expense; Supplies Expense; Insurance Expense; Rent Expense; and Depreciation Expense-Equipment. a. Depreciation on the company's equipment for the year is computed to be $18,000. b. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1,100 of unexpired insurance coverage remains. c. The Supplies account had a $700 debit balance at the beginning of the year, and $3,480 of supplies were purchased during the year. The December 31 physical count showed $300 of supplies available. d. Two-thirds of the work related to $15,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $6,800 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $5,800 of prepaid rent had expired. Check: c) Dr. Supplies Expense, $3,880 e) Dr. Rent Expense, $5,800 Wage expenses of $3,200 have been incurred but are not paid as of December 31.
Assume that rent of $12,000 was paid on September 1, to cover a one-year period from that date. Prepaid Rent was debited. If financial statements are prepared only on December 31 of each year, what adjusting entry is necessary on December 31 of the first year, to bring the accounts involved to their proper balances? b) Supplies were purchased for cash on May 2 for $8,000. Show how this purchase would be recorded. Then show the adjusting entry that would be necessary, assuming that $2,500 of the supplies remained at the end of the year and the beginning balance for supplies was $500. c) Assume that a company acquired a building on January 1, at a cost of $1,000,000. The building has an estimated useful life of 40 years and an estimated residual value of $200,000. What adjusting entry is needed on December 31 to record the depreciation for the entire year? d) On September 1, Professional Golfer Journal, Inc., received a total of $120,000 as payment in advance for one-year subscriptions to a monthly magazine. A liability account was credited to record this cash receipt. By the end of the year, one-third of the magazines paid for in advance had been delivered. Give the entries to record the receipt of the subscription fees and to adjust the accounts at December 31, assuming annual financial statements are prepared at year-end.
Adi S.
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