Several Transactions for Kincaid Co

question 89

Essay

Several transactions for Kincaid Co. are presented below. The company adjusts its books only at year-end.
a. On February 1, Kincaid Co. leased a warehouse to another company for $48,000 for a three-year period. The company credited a revenue account on February 1 when the total amount of $48,000 was received in cash.
b. On September 1, Kincaid Co. paid $6,000 to a local trucking company for certain deliveries spread evenly over a two-year period of time. The company charged an asset account on September 1.
c. On May 1, the company borrowed $10,000 on a 12%, one-year note.
d. On March 10, Kincaid Co. bought $300 of office supplies and debited the office supplies account. At the beginning of the year, office supplies of $50 were on hand and disclosed on the January 1 balance sheet. At the end of the year, there were $64 of office supplies on hand.
Required:
Prepare adjusting entries for December 31.

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Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of work done on incomplete units in terms of fully completed units.

Finished Goods Inventory

Manufactured products that are complete and ready for sale.

Cost Of Goods Sold

The total direct costs attributable to the production of the goods sold in a company, including materials and labor.

Physical Units

A measure of quantity in production or inventory, typically referred to when counting tangible products or items.