Prepare Adjusting Entries for the Year Ended December 31,for Each

question 158

Essay

Prepare adjusting entries for the year ended December 31,for each of these separate situations.Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance are initially recorded as liabilities.
a.The Prepaid Rent account has a debit balance of $8,000 before adjustment,representing a prepayment for four months' rent made on December 1 of the current year.
b.One-third of the work related to $18,000 of cash received in advance was performed during this period.
c.Unpaid accrued salaries at December 31 amounts to $15,000
d.Work was completed for a client on December 31 in the amount of $21,000,but was not previously billed or recorded.
e.Estimated depreciation on office equipment is $27,000.

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Definitions:

Identifiable Net Assets

Assets that can be separately identified and measured apart from the business entity, often relevant in the valuation of companies for acquisition or reporting purposes.

Non-Controlling Interest

The portion of equity in a subsidiary not owned directly or indirectly by the parent company.

Fair Value Enterprise Method

A valuation method where a business is valued based on the present value of its projected future earnings or cash flows, adjusted to their market value.

Consolidated Balance Sheet

A financial statement showing the combined assets, liabilities, and equity of a parent company and its subsidiaries as if they were a single entity.