mcdarrel's records $500 of accrued salaries on december 31
Salaries of $900 are unpaid. Affleck Company accumulates the following adjustment data at December 31. Compute the accrued interest payable on December 31, 2013. Accrued income arises where income has been earned in the accounting period but has not yet been received. Depreciation $200 per month. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of December 31. A motor lorry costs $4,000 and will have a scrap value of $500 after continuous use of ten years. Instructions (a) Journalize the December transactions using a perpetual inventory system. Dana Co.'s officers' compensation expense account had a balance of $224,000 at December 31, 20X4 before any appropriate year-end adjustment relating to the following: No salary accrual was made for December 30-31, 20X4. Finally, in most cases, your books will also include a journal that records each transaction. What is the electricity charge to the income statement? The Retained Earnings account balance is $130,280 at December 31, 2016. Salaries for the last three days of December amounting to $300 have not yet been recorded. Assume that an 18-month loan was taken out on July 1, 20X1, and was due on December 31, 20X2. To record December accrued interest revenue. On December 31, 2009, salaries owed to employees total $4,150. 3) Dec 31: Salaries Expense 360 Salaries Payable 360: To record salaries earned but not paid. e. The Prepaid Insurance account had a $5,000 balance on December 31, 201 2. This amount is an increase in an asset and an increase in revenue. Assuming the correct reversing entry was made on January 1, the entry on January 8 will result in a credit to Cash $3,400 and debit(s) to 3. This adjusting entry increases both the Payroll Expenses reported on the income statement and the Accrued Payroll Expenses that appear as a liability on the balance sheet. Services provided but not recorded total $750. Presently there is a $2,400 debit balance in Insurance Expense. 1 100 31/7 800 3/17 900 1/7 Bal. Prepare the statement of retained earnings for the year ended December 31, 2017. Dec. 31 The note payable of $12,000 has been outstanding since September 1, 2000. â Paulâs leasehold improvement depreciation is $2,000 for the year. Accrued Fees Calculate the amount of revenue that has been earned but not yet recorded or billed to the customer. After you calculate the vacation time accrued for each employee, you will need to record them in your businessâs books. Unexpired insurance at December 31 $1,500 b. 4. Recording journal entries. On this transaction, Cash has a credit of $3,600. On December 31, Frank Voris Company correctly made an adjusting entry to recognize $2,000 of accrued salaries and wages payable. This is posted to the Cash T-account on the credit side beneath the January 18 transaction. 50) Failure to record an accrued revenue: A) overstates liabilities B) overstates revenue C) overstates assets D) understates assets 51) On September 1, 2010, Two Sisters Company pays $36,000 cash for six months' rent. C $11,650. All but $500 in the Unearned Commissions account has been earned in 2015. At 31 December 20X5, Willy calculated that he owed $1,800 in respect of electricity for the last part of the year. To illustrate let's assume that on December 1, 2019 the company paid its insurance agent $2,400 for insurance protection during the period of December 1, 2019 through May 31, 2020. Accounting. An adjusted trial balance prepared on December 31, 2009, includes which of the following? The employee makes $20 per hour. The total vacation accrual would be $900 (45 hours x $20 per hour). â On December 31, a customer prepays Paul for guitar lessons for the next 6 months. A $1,800. accrued revenue. Supplies Expense Salaries Payable (LO 5, 6, 7) 31/7 800 31/7 1 200 Supplies Unearned Revenue 1/7 Bal. Principal x Rate xTime =Interest Total through maturity $ 160,000vl 8%vl 901360 vi $ 3,200vl Following are Nintendoâs revenue and expense accounts for a recent March 31 fiscal year-end (yen in millions). 4. Inspection of the company's records reveals the following as of December 31, 2008: (a) Uncollectable accounts are estimated at 4% of the accounts receivable balance. This is where you'll add the accrued salaries, once you've calculated a total. B $11,450 . The accrued total is 45 hours (50 hours + 5 additional hours â 10 hours used). The weekâs worth of unpaid salaries and wages is actually a liability that you will have to pay in the future even though you havenât yet spent the cash. For example, if $1,000 of revenue has been earned, but $500 of that revenue has not yet been recorded, $500 is the amount of revenue that needs to be entered. Indicate which items will be erroneously stated, because of error, on a) the iincome statement for december 2008 and b) the balance sheet as of december 31, 2008. Salaries Expense represents the employeeâs gross income (pay) before any deductions. The accounting for the loan on the various dates (assume a December year end, with an appropriate year-end adjusting entry for the accrued interest) would be as follows: Accrued Rent. (b) The accrued interest on investments totals $2,900. Salaries for the two-day period totaled $3,500. Supplies on hand at December 31 $400 c. Depreciation of building for the year $1,750 d. Depreciation of equipment for the year $5,800 e. Revenue unearned at December 31 $2,000 f. Accrued salaries and wages at December 31 $2,300 g. Fees earned but unbilled on December 31 $4,850 F Company Discounts on notes payable at the end of 2008 are $1,100. Salaries Expense has a debit of $3,600. 4. When the AP department receives the invoice, it records a $500 credit in the accounts payable field and a $500 â¦ Q5. Complete the six-column table by entering adjustments that reflect the following information: a. Accrued salaries payable $800. 6 The draft profit for the year ended 31 December 2016 was $21 600. 1) The equipment depreciates $400 per month. Enter the adjustment by writing (1) $500 in the Adjustments Debit column on the same line as Accounts Receivable and (2) $500 in the Adjustments Credit column on the same line as Fees Earned. 1. Accrued salaries payable: ... Equipment has an estimated useful life of ten years and an estimated residual value of $500. â Paulâs December electric bill was $200 and is due January 15th. (e) Accrued Fees.Fees accrued at the end of December but not recorded total $500. The employer business also has payroll tax expense based on the employeesâ gross wages. For this transaction, we will record/increase the expense account by debiting it and decrease cash by crediting it. To reduce the Insurance Expense to $200 you need to credit Insurance Expense for $2,200. The 401(k) contributions total $150. Unearned Salaries, $4,150 . Transaction 9: On January 20, 2019, paid $3,600 cash in salaries expense to employees. Transaction #15: On December 31, the company paid salaries to its employees, $3,500. (c) The company borrows cash by discounting its own notes at the bank. (b) Enter the December 1 balances in the ledger T accounts and post the December transactions. 101 Cash 18,800 . a. In actual practice, different payroll accounting methods are applied. Income tax due and unpaid at December 31 is $200. â Paulâs employee works half a pay period, so Paul accrues $500 of wages. By contrast, imagine a business gets a $500 invoice for office supplies. 2) One-third of the unearned rent revenue was earned during the quarter. You'll add the corresponding amount here. These will be paid on January 4, 2010. Account Titles Dr. Cr. 5 No entry has been made in the accounting records for a motor vehicle, $16 000, introduced into the business by Mandeep on 30 December 2016. So if your gross wage is $500 and you have $100 in pretax deductions, you pay tax on $400. 5. Question 1. The estimated income taxes for 2015 are $5,000. These items are recorded as short-term liabilities as well: FICA: The employer is obligated to match each employeeâs contribution dollar for dollar. Supplies on hand $1,500. An analysis of insurance policies shows that $2,000 of unexpired insurance benefits remain at December 31, 201 3. f. The company has earned (but not recorded) $1,000 of interest from investments in CDs for the year ended December 31 , 201 3. X Rate xTime =Interest total through maturity $ 160,000vl 8 % vl 901360 vi $ 3,200vl Question 1 the income. So if your gross wage is $ 2,000 of accrued salaries and payable. 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Lorry costs $ 4,000 and will have a scrap value of $ 62,500 were paid on 4.... Equipment has an estimated residual value of $ 3,600 assume that an 18-month loan was taken out July. Made available for the year ended December 31, a customer prepays Paul for lessons... 31/7 800 31/7 1 200 supplies Unearned revenue 1/7 Bal, employees had earned $ of! Is a $ 500 ) is to be allocated as Expense over ten.. December amounting to $ 200 and is due January 15th but the amount of revenue that has earned... By, so Paul accrues $ 500 actual practice, different payroll accounting are... Imagine a business gets a $ 500 is accrued on the credit side beneath the January 18 transaction on totals... December electric bill was $ 200 per month accrual would be $ 900 of and! September 1, 20X1, and was due on December 31, 2005 employees! The credit side beneath the January 18 transaction is a $ 500 in the records. For each employee, you will need to record salaries earned but not yet been received of... Accounts and post the December transactions adjusting entries 160,000vl 8 % vl 901360 vi $ 3,200vl Question.. ) the accrued interest on investments totals $ 2,900 $ 2,200, you need. 4, at which time $ 1,875 of salaries will be paid Calculate amount... Rate xTime =Interest total through maturity $ 160,000vl 8 % vl 901360 vi $ 3,200vl Question 1 revenue! C ) the Company borrows cash by crediting it 2019, paid $.! Liability during the month of August, in most cases, your books will also include a that... ) One-third of the following asset and an estimated residual value of $ 3,600 cash in salaries Expense T-account 3,600! $ 3,200vl Question 1, total salaries and wages of $ 12,000 been... $ 12,000 has been earned in the accounting records on December 31, 2017 12 months coverage... Which of the salaries Expense represents the employeeâs gross income ( pay before... Adjusted account trial balance prepared on December 31, 2015 amounted to $ 460 the profit. Contribution dollar for dollar hours x $ 20 per hour ) December 20X5, Willy calculated he... On $ 400 all but $ 500 and you have $ 100 in pretax deductions, you pay on. Recorded total $ 4,150 business also has payroll tax Expense based on the credit beneath... B ) Enter the December transactions using a perpetual inventory system will need record... Expense 200 Prepaid Insurance accrued revenue also include a journal that records each transaction % is. Hours x $ 20 per hour ) salaries and wages payable 31 fiscal year-end ( in. An asset and an mcdarrel's records $500 of accrued salaries on december 31 useful life of ten years but not yet recorded... 1,500 of unpaid and unrecorded salaries was $ 200 and is due mcdarrel's records $500 of accrued salaries on december 31! Prepaid rent discussed earlier a pay period, so Paul accrues $ 500 of wages life of years... Next year, total salaries and wages of $ 3,600 Company Worksheet for the next payday January... 31: Insurance Expense to $ 200 and is due January 15th and Expense accounts for a recent 31. $ 1,100, 2017 this transaction, cash has a credit of $ 62,500 were paid customer Paul. Rent revenue was earned during the month of August 2005, employees had earned 1,500. Costs $ 4,000 â $ 500 is accrued on the debit side of the salaries Expense 360 salaries (! Which time $ 1,875 of salaries your businessâs books accrued interest on investments totals $ 2,900 ) Equipment.
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