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Accounting quesiont?

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can you guy help me with this question i have no idea how to do this on the first day of classes. thank you

1. On October 1, Year 1, ABC Company paid $24,000 for insurance coverage for the period 10-1-1 through 3-31-2. The prepaid insurance account was debited on October 1. The balance in the account prior to this transaction was $16,000. The $16,000 represents payments for insurance coverage that has expired by the end of the year. There has been no activity in the account since the October 1 transaction (i.e. account balance is $40,000).

What amount should be reported as prepaid insurance on ABC’s 12-31-1balance sheet?

What year end AJE should have been made by ABC based on the above information?

2. Employees of the KathyLee Gifford Company (KGC) are paid weekly. On January 6, Year 2 wages totaling $140,000 were paid for the workweek December 27 through January 2. Wages were earned equally per day during the workweek. Assume that employees work 7 days a week, with no over time, holidays, or the like (i.e. wage costs to the company are $20,000 a day).

What amount should be reported as wages payable on KGC’s 12-31-1balance sheet?

What year end AJE should have been made by KGC based on the above information?

3. At year end the balance in the ADA account was a debit of $5,000. The balance in A/R at year end is $130,000. Based on an aging of A/R it was estimated that 10% of year-end balance in A/R would be uncollectible.

What amount should be reported as net accounts receivable on the 12-31-1balance sheet?

What year end AJE should have been made based on the above information?

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1 ANSWERS


  1. Qn 1

    What amount should be reported as prepaid insurance on ABC’s 12-31-1balance sheet?

    $12,000

    What year end AJE should have been made by ABC based on the above information?

    Dr  Insurance expense $28,000

    Cr  Prepaid insurance $28,000

    Qn 2

    What amount should be reported as wages payable on KGC’s 12-31-1balance sheet?

    $100,000

    What year end AJE should have been made by KGC based on the above information?

    Dr  Wages expense $100,000

    Cr  Wages payable $100,000

    Qn 3

    What amount should be reported as net accounts receivable on the 12-31-1balance sheet?

    $117,000

    What year end AJE should have been made based on the above information?

    Dr  Doubtful accounts expense $18,000

    Cr  Allowance for doubtful accts $18,000

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