aEx. 203
On December 31, 2011 the adjusted trial balance of the High Country Match Service shows the following selected data:
Commissions Receivable, $7,000
Commission Revenue, $70,000
Salaries Expense, $10,500
Salaries Payable, $2,500
Insurance Expense, $4,800
Income Tax Expense, $6,400
Income Tax Payable Payable, $2,400
Analysis indicates that adjusting entries were made for (a) $7,000 of commission revenue earned but not billed, (b) $2,500 of accrued but unpaid salaries, and (c) $2,400 of income tax expense accrued but not paid.
Instructions
(a)Prepare the closing entries at December 31, 2011.
(b)Prepare the reversing entries on January 1, 2012.
(c)Enter the adjusted trial balance data in T-accounts. Post the entries in (a) and (b) and rule and balance the accounts.
(d)Prepare the entries to record (1) the collection of the accrued commission on January 8, (2) payment of the utility bill on January 10, and (3) payment of all the interest due ($3,000) on January 15.
(e)Post the entries in (d) to the temporary accounts.
(f)What is the interest expense for the month of January 2012?
aEx. 204
Transaction and adjustment data for Alcortt Company for the calendar year end is as follows:
1.December 24 (initial salary entry): $12,000 of salaries earned between December 1 and December 24 are paid.
2.December 31 (adjusting entry): Salaries earned between December 25 and December 31 are $2,000. These will be paid in the January 8 payroll.
3.January 8 (subsequent salary entry): Total salary payroll amounting to $7,000 was paid.
Instructions
Prepare two sets of journal entries as specified below. The first set of journal entries should assume that the company does not use reversing entries, and the second set should assume that reversing entries are utilized by the company.
Assume no reversing entriesAssume reversing entries
(a)Initial Salary Entry
Dec. 24
(b)Adjusting Entry
Dec. 31
aEx. 204 (Cont.)
(c)Closing Entry
Dec. 31
(d)Reversing Entry
Jan. 1
(e)Subsequent Salary Entry
Jan. 8