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  • E3-5 Hwang Ltd. Has The Following Balances in Selected Accounts On December 31, 2017.accounts Receivable NT$ - 0

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    arjun lado
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    The document records several business transactions for a company over the month of September and October. On September 1st, the company received €10,000 cash in exchange for shares. On September 5th, equipment was purchased for €12,000 with €4,000 paid in cash and €8,000 financed. On September 25th, €2,400 cash was paid to settle the balance for the equipment. On September 30th, a €500 cash dividend was declared and paid.

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    1,7

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    The document records several business transactions for a company over the month of September and October. On September 1st, the company received €10,000 cash in exchange for shares. On September 5th, equipment was purchased for €12,000 with €4,000 paid in cash and €8,000 financed. On September 25th, €2,400 cash was paid to settle the balance for the equipment. On September 30th, a €500 cash dividend was declared and paid.

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    580 views3 pages

    E3-5 Hwang Ltd. Has The Following Balances in Selected Accounts On December 31, 2017.accounts Receivable NT$ - 0

    Uploaded by

    arjun lado
    The document records several business transactions for a company over the month of September and October. On September 1st, the company received €10,000 cash in exchange for shares. On September 5th, equipment was purchased for €12,000 with €4,000 paid in cash and €8,000 financed. On September 25th, €2,400 cash was paid to settle the balance for the equipment. On September 30th, a €500 cash dividend was declared and paid.

    Copyright:

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    of 3

    Sep- Invested €10,000 cash in the business in exchange for ordinary

    01 shares
    Cash       € 10,00
    Share Capital—Ordinary      

    Purchased equipment for €12,000 paying €4,000 in cash and the balance
    5
    on account
    Equipment       € 12,00
      Cash      
      Account Payabel      

    25 Paid €2,400 cash on balance owed for equipment.


    Account Payabel       € 2,40
      Cash      

    30 Declared and paid a €500 cash dividend


    Dividends       € 500
      Cash      

    E3-3 Concordia Industries Ltd. collected £112,000 from customers in 2017. Of the
    amount collected, £30,000 was from revenue accrued from services performed in 2016.
    In addition, Concordia recorded £44,000 of revenue in 2017, which will not be collected
    until 2018.Concordia Industries also paid £72,000 for expenses in 2017. Of the
    amount paid, £27,000 was for expenses incurred on account in 2016. In addition,
    Concordia incurred £37,000 of expenses in 2017, which will not be paid until 2018.
    Instructions
    (a) Compute 2017 cash-basis net income.
    (b) Compute 2017 accrual-basis net income.

    E3-5 Hwang Ltd. has the following balances in selected accounts on December 31,
    2017.Accounts Receivable NT$ –0–Accumulated Depreciation—Equipment –0–Equipment
    210,000Interest Payable –0–Notes Payable 240,000Prepaid Insurance 63,100Salaries and
    Wages Payable –0–Supplies 73,500Unearned
    Service Revenue 900,000Distinguish between cash and accrual basis of accounting.(LO
    2)Compute cash and accrual accounting income.(LO 2)Identify the type of adjusting entry
    needed.(LO 4)Prepare adjusting entries from selected data.(LO 5, 6)
    142 3 Adjusting the AccountsAll the accounts have normal balances. The information
    below has been gathered at December 31, 2017.1. Hwang borrowed NT$240,000 by
    signing a 6%, 1-year note on October 1, 2017.2. A count of supplies on December 31, 2017,
    indicates that supplies of NT$23,400 are on hand.3. Depreciation on the equipment for
    2017 is NT$30,000.4. Hwang paid NT$63,000 for 12 months of insurance coverage on June
    1, 2017.5. On December 1, 2017, Hwang collected NT$900,000 for consulting services to be
    per-formed from December 1, 2017, through March 31, 2018.6. Hwang performed
    consulting services for a client in December 2017. The client will be billed NT$117,000.7.
    Hwang pays its employees total salaries of NT$270,000 every Monday for the preceding 5-
    day week (Monday through Friday). On Monday, December 29, employees were paid for the
    week ending December 26. All employees worked the last 3 days of
    2017.InstructionsPrepare annual adjusting entries for the seven items described above

    E3-7 The ledger of Villa Rental Agency SpA on March 31 of the current year includes the
    selected accounts, shown below, before adjusting entries have been prepared.
    Debit CreditPrepaid Insurance € 3,600Supplies
    2,800Equipment 25,000Accumulated Depreciation—
    Equipment € 8,400Notes Payable 20,000Unearned Rent Revenue 9,900Rent Revenue
    60,000Interest Expense –0–Salaries and Wages Expense 14,000An analysis of the accounts
    shows the following.1. The equipment depreciates €320 per month.2. One-third of the
    unearned rent revenue was earned during the quarter.3. Interest totaling €500 is accrued
    on the notes payable for the quarter.4. Supplies on hand total €840.5. Insurance expires at
    the rate of €200 per month.InstructionsPrepare the adjusting entries at March 31, assuming
    that adjusting entries are made quar-terly. Additional accounts are Depreciation Expense,
    Insurance Expense, Interest Pay-able, and Supplies Expense.
    Compute cash and accrual accounting income.
     
    Concordia Industries collected $105,000 from customers in 2014. Of the amountcollected,
    $28,000 was from revenue accrued from services performed in 2013. In addition,Concordia
    recognized $44,000 of revenue in 2014, which will not be collected until 2015.Concordia
    Industries also paid $72,000 for expenses in 2014. Of the amount paid,$30,000 was for
    expenses incurred on account in 2013. In addition, Concordia incurred$37,000 of expenses in
    2014, which will not be paid until 2015.
    Instructions
    (a)Compute 2014 cash-basis net income.
    (b)Compute 2014 accrual-basis net income.

    (a) 2014 cash-basic net income


    Revenues = $105,000Expenses = $72,000 Net income = 105,000
     – 
     72,000 = $33,000

    (b) 2014 accrual-basic net income


    Revenues = $105,000 - $28,000 + $44,000 = $121,000Expenses = $72,000 - $30,000 + $37,0
    00 = $ 79,000 Net income = 121,000
     – 
     79,000 = $42,000

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