ACC 211 homeworks

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timer Asked: Feb 20th, 2018

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Problem 3-3B Preparing adjusting entries, adjusted trial balance, and financial statements A19 P1 P2 P3 Following is the unadjusted trial balance for Alonzo Institute as of December 31, 2017. The Institute provides one-on-one training to individuals who pay tuition directly to the business and offers extension training to groups in off-site locations. Shown after the trial balance are items a through h that require adjusting entries as of December 31, 2017. A B с Credit Debit $ 60,000 0 70,000 19,000 3.800 12,000 $ 2,500 40,000 ALONZO INSTITUTE Unadjusted Trial Balance 1 December 31, 2017 2 3 Cash Accounts receivable 5 Teaching supplies 6 Prepaid insurance 7 Prepaid rent 8 Professional library 9 Accumulated depreciation-Professional library 10 Equipment 11 Accumulated depreciation-Equipment 12 Accounts payable 13 Salaries payable 14 Unearned training fees 15 C. Alonzo, Capital 16 C. Alonzo, Withdrawals 17 Tuition fees earned 18 Training fees earned 19 Depreciation expense Professional library 20 Depreciation expense-Equipment 21 Salaries expense 22 Insurance expense 23 Rent expense 24 Teaching supplies expense 25 Advertising expense 26 Utilities expense 27 Totals 20,000 11 200 0 28.600 71,500 20,000 129,200 68,000 O 0 44,200 0 29,600 0 19,000 13.400 $331 000 $331,000 23 Rent expense 24 Teaching supplies expense 25 Advertising expense 26 Utilities expense 27 Totals 29,600 0 19,000 13,400 $331,000 $331,000 Page 140 Additional Information Items a. An analysis of the Institute's insurance policies shows that $9.500 of coverage has expired. b. An inventory count shows that teaching supplies costing $20,000 are available at year-end 2017 c. Annual depreciation on the equipment is $5.000. d. Annual depreciation on the professional library is $2.400. e On November 1, the Institute agreed to do a special five-month course (starting immediately) for a client. The contract calls for a $14,300 monthly fee, and the client paid the first two months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The last two months' fees will be recorded when collected in 2018 1. On October 15, the Institute agreed to teach a four-month class (beginning immediately) to an individual for $2.300 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (The Institute's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.) g. The Institute's only employee is paid weekly. As of the end of the year, three days' salaries have accrued at the rate of $150 per day. h. The balance in the Prepaid Rent account represents rent for December Required 1. Prepare T-accounts representing the ledger) with balances from the unadjusted trial balance. 2. Prepare the necessary adjusting journal entries for items a through) and post them to the T-accounts. Assume that adjusting entries are made only at year-end. 3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance. 4. Prepare the company's income statement and statement of owner's equity for the year 2017. and prepare its balance sheet as of December 31, 2017 Check 2ej C. Training Fees Earned, $28,600 318d on Fees wie balans 1900. Emaine Alonzo, Capital 5105,700 14) Net income х W ** Comparative Analysis A2@ 1 BTN 3-2 Key figures for the recent two years of both Apple and Google follow, APPLE GOOGLE Apple Current Year Prior Year Google Current Year Prior Year $ millions $ 53,394 Net income Net sales $ 39,510 182.795 $16,348 74,989 $14,136 66,001 233,715 Required 1. Compute profit margins for (a) Apple and (b) Google for the two years of data shown. 2. Which company is more successful on the basis of profit margin? Explain. - thic Challenge C1 C2 A1 Ethics Challenge C1 C2 A1 T BTN 3-3 Jessica Boland works for Sea Biscuit Co. She and Farah Smith, her manager, are preparing adjuſting entries for annual financial statements. Boland computes depreciation and records it as 122.000 Depreciation Expense-Equipment Accumulated Depreciation Equipment 123,000 Smith agrees with her computation but says the credit entry should be directly to the Equipment account. Smith argues that while accumulated depreciation is technically correct, it is less hassle not to use a contra account and just credit the Equipment account directly. And besides, the balance sheet shows the same amount for total assets under either method." Required 1. How should depreciation be recorded? Do you support Boland or Smith? 2. Evaluate the strengths and weaknesses of Smith's reasons for preferring her method 3. Indicate whether the situation Boland faces is an ethical problem. Explain.
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