121) The following transactions for Carleton Company occurred during January 2010:
1Purchased a two-year insurance policy for cash, $8,400.
4Paid utilities bill received in December 2009, $450.
9Performed a service on account, $1,200.
16Paid bimonthly salary to employees, $2,700.
21Received $800 from a customer on account.
25Received $600 from January 9 transaction.
30Prepared the adjusting entry for insurance from January 1 transaction.
30Accrued wages of $2,750.
Required: Show the amount of revenue and expense recognized for each transaction under both the accrual basis and the cash basis of accounting by completing the charts below.
ACCRUAL BASIS
CASH BASIS
122) Prepare adjusting entries dated December 31, 2010, based on the following data.
a.A two-year insurance policy costing $3,000 was purchased on October 31, 2010.
b.Salaries owed to employees on December 31, 2010, amount to $2,300.
c.The balance in Supplies before adjustment is $1,400. A physical count reveals $450 of supplies on hand on December 31, 2010.
d.Depreciation on office equipment for the year is $1,869.
e.Unearned Service Revenue has a balance of $4,200 before adjustment. Records show that $2,725 of that amount has been earned by December 31, 2010.
123) Given the following adjustment data, state whether the resulting adjustment will be a deferral or an accrual.
a.Supplies were used during the month.
b.Estimated the monthly utilities bill and recorded the expense.
c.Unearned service revenue had been earned by the end of the month.
d.Recorded the monthly depreciation on the office equipment.
e.Recorded salaries owed to employees at the end of the month but not paid until early next month.
f.Recorded interest earned on a note receivable but not yet collected.
124) Explain the concept of unearned revenue using your student tuition fees. How does your academic institution account for the payment of tuition in its financial statements?
125) Explain the concept of accrued expenses using a Le Chateau store as an example.