Adjusting entries clapton guitar company, Financial Accounting

Assignment Help:

Adjusting Entries Clapton Guitar Company entered into the following transactions during 2013. [The transactions were properly recorded in permanent (balance sheet) accounts unless otherwise indicated.]
Date Transaction Jan. 25 Purchased $480 of of?ce supplies.
Feb. 1 Rented a warehouse from Hendrix Company, paying 1 year's rent of $3,600 in advance. Recorded the $3,600 payment as rent expense.
Mar. 1 Borrowed $10,000 from the bank, signing a 1-year note at an annual interest rate of 12%. The bank insisted on collecting the interest in advance, so it withheld the interest amount from the funds disbursed to Clapton. The company recorded the transaction as a debit to Cash, $8,800, a debit to Interest Expense, $1,200, and a credit to Notes Payable, $10,000.
May 1 Purchased of?ce equipment for $15,000, paying $3,000 down and signing a 2-year, 12% (annual rate) note payable for the balance. The of?ce equipment is expected to have a useful life of 10 years and a residual value of $1,500. Straight-line depreciation is appropriate.
May 31 Purchased a 3-year comprehensive insurance policy for $720.
Aug. 1 Sold land for $9,000. The purchaser made a $2,000 down payment and signed a 1-year, 10% note for the balance. The interest and principal will be collected on the maturity date.
Oct. 1 Rented a portion of the retail ?oor space to Harrison Inc. for $120 per month, collecting 8 months' rent in advance. Recorded the $960 receipt as rent revenue.
Nov. 13 Issued checks to sales personnel totaling $900. The checks are advances for expected travel costs during the remainder of the year.On December 31, 2013, the following additional information is available:
1. Property taxes for 2013 are due to be paid by April 1, 2014. The company has not paid or recorded its $2,300 property taxes for 2013.
2. The $302 December utility bill has not been recorded or paid.
3. Salaries accrued but not paid total $927.
4. Travel cost reports indicate that $787 of the $900 advanced has been used to pay for travel expenses by com-pany personnel.
5. The Of?ce Supplies account had a balance of $129 on January 1, 2013. A physical count on December 31, 2013, showed $174 of of?ce supplies on hand.
6. On January 1, 2013, the Buildings account and the Store Equipment account had balances of $100,000 and $65,000, respectively. The buildings are expected to have a 20-year useful life and an $8,000 residual value, while the store equipment is expected to have a 10-year life and a $2,000 residual value. They are being depre-ciated using the straight-line method.
7. The income tax rate is 30% on current income and is payable in the ?rst quarter of 2014. The pretax income of the company before adjustments is $27,749.
Required: On the basis of the preceding information, prepare journal entries to adjust Clapton's books as of December 31, 2013. Each entry explanation should include supporting computations. (Round to the nearest dollar.)


Related Discussions:- Adjusting entries clapton guitar company

Total amount capitalized for the patent account, Gomez incurred $350,000 of...

Gomez incurred $350,000 of research and development costs to develop a product for which a patent was granted on January 2, 2008. Legal fees and other costs associated with the reg

Personal financial specialist, Personal Financial Specialist (PFS) - CERTIF...

Personal Financial Specialist (PFS) - CERTIFIED PUBLIC ACCOUNTANT who specializes in PERSONAL FINANCIAL PLANNING and completes a series of requirements which compriseexperience, ed

the extra amount to be paid , The purchase of a car needs a $23,410 loan t...

The purchase of a car needs a $23,410 loan to be repaid in monthly installments for 4years at 12% annual real interest rate. If annual inflation rate is 4%, find the extra amount t

Why convertibles might be an attractive source, Q. Why convertibles might b...

Q. Why convertibles might be an attractive source of finance for companies? - Convertibles is able to provide immediate finance at lower cost since the conversion option effect

Advantages and disadvantages of curve , You would like to start investing i...

You would like to start investing in the bond markets and your investment horizon is two years.  In view of the current extremely low interest rate environment, you expect the U.S.

Objectives of inventory management, The twin objectives of inventory manage...

The twin objectives of inventory management are financial and operational. The operational objective implies that the materials and spares would be obtainable in sufficient quantit

UNDERSTANDING bUSINESS, I NEED HELP in business ratios for two company.Ido...

I NEED HELP in business ratios for two company.Ido not know how to do the formulas. Can you help.

What are the effects on current income, What are the effects on current inc...

What are the effects on current income and on future income, if a firm incorrectly capitalizes an expenditure that it should have expensed?   State your answer for both current inc

Cashflows from financing activities-group accounts, Cashflows from financin...

Cashflows from financing activities Financing activities are those activities that will lead to either an increase or decrease in shareholders funds and long-term liabilities.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd