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122
268) The information necessary for preparing year-end adjusting entries appears below. The
company's fiscal year-end is December 31.
a. Utilities for the month of December are $6,100 but won't be paid until January of the
following year.
b. On April 1, the company collected $16,000 from customers for services to be provided over
the next 12 months. At that time, the amount was credited to Deferred Revenue. By the end of
the year, nine months of those services have been provided.
c. On October 1, $12,000 was paid to rent space over the next nine months. At that time, the
amount was debited to Prepaid Rent.
d. On December 1, the company agrees to provide services for a three-month period and to
receive payment of $6,000 at the end of that period. By the end of the year, one month of
services have been provided.
Required:
Record the necessary year-end adjusting entries. No prior adjustments have been made during
the year.
123
269) The information necessary for preparing the 2021 year-end adjusting entries for Winter
Storage appears below. Winter's fiscal year-end is December 31.
a. Depreciation on the equipment for the year is $7,000.
b. Salaries earned by employees (but not paid to them) from December 16 through December 31,
2021, are $3,400.
c. On March 1, 2021, Winter lends an employee $12,000 and a note is signed requiring principal
and interest at 6% to be paid on February 28, 2022.
d. On April 1, 2021, Winter pays an insurance company $15,000 for a one-year fire insurance
policy. The entire $15,000 is debited to prepaid insurance at the time of the purchase.
e. $1,500 of supplies are used in 2021.
f. A customer pays Winter $4,200 on October 31, 2021, for six months of storage to begin
November 1, 2021. Winter credits deferred revenue at the time of cash receipt.
g. On December 1, 2021, $4,000 rent is paid to a local storage facility. The payment represents
storage for December 2021 through March 2022, at $1,000 per month. Prepaid rent is debited at
the time of the payment.
Required:
Record the necessary adjusting entries at December 31, 2021. No prior adjustments have been
made during 2021.
125
270) David's Services provides general home maintenance to customers. The company's fiscal
year-end is December 31. The December 31, 2021, trial balance (before any adjusting entries)
appears below.
Accounts
Debits
Credits
Cash
$18,100
Accounts Receivable
16,200
Supplies
20,400
Prepaid Rent
15,000
Equipment
95,000
Accumulated Depreciation
$27,200
Accounts Payable
10,500
Salaries Payable
-0-
Utilities Payable
-0-
Interest Payable
-0-
Notes Payable
40,000
Common Stock
24,000
Retained Earnings
10,500
Dividends
2,500
Service Revenue
224,900
Salaries Expense
158,500
Depreciation Expense
-0-
Rent Expense
-0-
Supplies Expense
-0-
Utilities Expense
11,400
Interest Expense
-0-
________
Totals
$337,100
$337,100
Information necessary to prepare the year-end adjusting entries appears below.
a. Depreciation on the equipment for the year is $13,600.
b. Employees' salaries are paid every two weeks. The last pay period ended on December 23.
Salaries earned from December 24 through December 31, 2021, are $4,200.
c. On August 1, 2021, David's borrows $40,000 from a local bank and signs a note. The note
requires interest to be paid annually on August 31 at 12%. The principal is due in four years.
d. On April 1, 2021, the company pays $15,000 for rental equipment for the next 12 months. The
entire $15,000 was debited to Prepaid Rent on April 1.
e. $3,000 of supplies remains on hand at December 31, 2021.
f. On December 30, David's receives a utility bill of $1,900 for the month. The bill will not be
paid until early January, 2022, and no entry was recorded when the bill was received.
Required:
Prepare the necessary adjusting entries on December 31, 2021.
127
271) The general ledger of Advanced Health at January 1, 2021, includes the following account
balances:
Accounts
Debits
Credits
Cash
$4,500
Accounts Receivable
8,300
Supplies
3,700
Equipment
26,400
Accumulated Depreciation
$5,800
Accounts Payable
4,200
Utilities Payable
5,500
Deferred Revenue
-0-
Common Stock
19,000
Retained Earnings
8,400
Totals
$42,900
$42,900
The following is a summary of the transactions for the year:
a. Provide health services for cash, $18,000, and on account, $62,000.
b. Collect on accounts receivable, $45,000.
c. Issue shares of common stock in exchange for $12,000 cash.
d. Pay salaries for the current year, $36,000.
e. Pay utilities, $13,000, of which $5,500 represents costs for 2020.
f. Receive cash in advance from customers, $7,000.
g. Pay $3,000 cash dividends to stockholders.
Required:
1. Set up the necessary T-accounts and enter the beginning balances from the trial balance. In
addition to the accounts shown, the company has accounts for Dividends, Service Revenue,
Salaries Expense, Utilities Expense, Supplies Expense, and Depreciation Expense.
2. Record each of the summary transactions listed above.
3. Post the transactions to the accounts.
4. Prepare an unadjusted trial balance.
5. Record adjusting entries. Depreciation for the year on the equipment is $2,900. Supplies
remaining on hand at the end of the year equal $1,200. Of the $7,000 paid in advance by
customers, $4,000 of the work has been completed by the end of the year.
6. Post adjusting entries.
7. Prepare an adjusted trial balance.
8. Prepare an income statement for 2021 and a classified balance sheet as of December 31, 2021.
9. Record closing entries.
10. Post closing entries
11. Prepare a post-closing trial balance.
137
272) The general ledger of FastTrack Racing at January 1, 2021, includes the following account
balances:
Accounts
Debits
Credits
Cash
$42,500
Accounts Receivable
25,800
Land
115,800
Accounts Payable
15,100
Notes Payable
30,500
Common Stock
100,000
Retained Earnings
38,500
Totals
$184,100
$184,100
The following is a summary of the transactions for the year:
a. Provide services to customers on account, $63,400.
b. Provide services to customers for cash, $75,800.
c. Collect on accounts receivable, $45,600.
d. Issue shares of common stock in exchange for $32,000 cash.
e. Purchase supplies on account, $12,700.
f. Pay on accounts payable, $11,500.
g. Pay salaries for employee work in the current year, $66,200.
h. Pay advertising for the current year, $21,500.
i. Pay $2,800 cash dividends to stockholders.
Required:
1. Set up the necessary T-accounts and enter the beginning balances from the trial balance. In
addition to the accounts shown, the company also has accounts for Supplies, Salaries Payable,
Interest Payable, Dividends, Service Revenue, Salaries Expense, Advertising Expense, Interest
Expense, and Supplies Expense.
2. Record each of the summary transactions listed above.
3. Post the transactions to the accounts.
4. Prepare an unadjusted trial balance.
5. Record adjusting entries. Accrued interest on the notes payable at year-end amounted to
$2,800. Accrued salaries at year-end amounted to $2,500. Supplies remaining on hand at the end
of the year equal $2,600.
6. Post adjusting entries.
7. Prepare an adjusted trial balance.
8. Prepare an income statement for 2021 and a classified balance sheet as of December 31, 2021.
9. Record closing entries.
10. Post closing entries
11. Prepare a post-closing trial balance.
