Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / When the accounts of Splish Inc
When the accounts of Splish Inc. are examined, the adjusting data listed below are uncovered on December 31, the end of an annual fiscal period.
1. The prepaid insurance account shows a debit of $4,272, representing the cost of a 2-year fire insurance policy dated August 1 of the current year.
2. On November 1, Rent Revenue was credited for $1,767, representing revenue from a subrental for a 3-month period beginning on that date.
3. Purchase of advertising materials for $842 during the year was recorded in the Advertising Expense account. On December 31, advertising materials of $307 are on hand.
4. Interest of $843 has accrued on notes payable. The interest will be paid in January of the next year.
Prepare the following in general journal form. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
(a) The adjusting entry for each item.
No. Account Titles and Explanation Debit Credit
1.
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
2.
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
3.
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
4.
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
enter an account title for the adjusting entry
enter a debit amount
enter a credit amount
(b) The reversing entry for each item where appropriate.
No. Account Titles and Explanation Debit Credit
1.
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
2.
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
3.
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
4.
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
enter an account title for the reversing entry
enter a debit amount
enter a credit amount
Journal entry-
1 - Insurance A/c Dr 4272
To Cash A/c ______________ 4272
( Being insurance expense paid)
2- Cash A/c Dr 1767
To Rent A/c___________ 1767
( being rent received)
3- Advertising material A/c Dr 842
To Cash A/c_________________________ 842
( Being Advertising material purchased)
4- Interest A/c Dr 843
To Note Payable A/c 843
( Being Interest recorded)
Reversing entry
1- Prepaid insurance A/c Dr 3382
To Insurance A/c _________________3382
( Being prepaid insurance recorded)
( working - Insurance for the current year = 4272 * 5/24 months = 890, prepaid insurance = 4272- 890 = 3382)
2- Rent A/c Dr 408
To Outstanding Rent A/c 408
( Being outstanding rent received)
( Working - Rent has been collected from 1,October of the previous year to 1, November of next year. Thus making it for 13 months. This includes 3 months of previous year. Hence the outstanding rent which received in this year is = 408 [ 1767*3/13 months]
3- Consumption of Advertising material A/c Dr 535
To Advertising material A/c___________________________535
( Being Advertising material consumed)
( working - Advertising material on hand is 307 i.e. the balance in advertising material should be 307. Which says that 535 ( 842- 307) is consumed during the year.
4- Note Payable A/c Dr 843
To Interest Accrued A/c 843
( being Interest accrued)
( Working - As note payable will be long term liability. thus, needs to be transferred in current liability account that is interest accrued account)
