Accounting Misc. Problems
Accounting Misc. Problems
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During March, the activities of Evergreen Landscaping included the following transactions and events, among others. Which of these items represented expenses in March? Explain.
a. Purchased a copying machine for $2,750 cash.
b. Paid $192 for gasoline purchase for a delivery truck during March.
c. Paid $2,280 salary to an employee for time worked during March.
d. Paid an attorney $560 for legal services rendered in January.
e. Declared and paid a $1,800 dividend to shareholders.
4.3 The Golden Goals, a professional soccer team, prepares financial statements on a monthly basis. The soccer season begins in May, but in April the team engaged in the following transactions:
1. Paid $1,200,000 to the municipal stadium as advance rent for use of the facilities for the five-month period from May 1 through September 30. This payment was initially recorded as Pre-paid rent.
2. Collected $4,500,000 cash from the sale of season tickets for the team’s home games. The entire amount was initially recorded as Unearned Ticket Revenue. During the month of May the Golden Goals played several home games at which $ 148,800 of the season tickets sold in April were used by fans. Prepare the two adjusting entries required on May 31.
4.7 Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2011:
1. A bank loan had been obtained on December 1. Accrued interest on the loan at December 31 amounts to $1,200. No interest expense has yet been recorded.
2. Depreciation of the firm’s office building is based on an estimated life of 25 years. The building was purchased in 2007 for $330,000.
3. Accrued, but unbilled, revenue during December amounts to $64,000.
4. On March 1, the firm paid $1,800 to renew a 12-month insurance policy. The entire amount was recorded as Prepaid Insurance.
5. The firm received $14,000 from the King Biscuit Company in advance of developing a six-month marketing campaign. The entire amount was initially recorded as Unearned Revenue. At December 31, $3,500 had actually been earned by the firm.
6. The company’s policy is to pay its employees every Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $2,400.
a. Record the necessary adjusting journal entries on December 31, 2011. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar. Omit the “$” sign in your response.)
b. By how much did Sweeney & Associates’ net income increase or decrease as a result of the adjusting entries performed in part a? (Ignore income taxes.) (Omit the “$” sign in your response.)
