For Each of the Following, Journalize the Necessary Adjusting Entry

question 194

Essay

For each of the following, journalize the necessary adjusting entry:
(a)A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that the fiscal period ends (1) on Tuesday, (2) on Wednesday.(b)The balance in the prepaid insurance account before adjustment at the end of the year is $18,000. Journalize the adjusting entry required under each of the following alternatives: (1) the amount of insurance expired during the year is $5,300, (2) the amount of unexpired insurance applicable to a future period is $2,700.(c)On July 1 of the current year, a business pays $54,000 to the city for license taxes for the coming fiscal year. The same business is also required to pay an annual property tax at the end of the year. The estimated amount of the current year's property tax allocated to July is $4,800. (1) Journalize the two adjusting entries required to bring the accounts affected by the taxes up to date as of July 31. (2) What is the amount of tax expense for July?
(d)The estimated depreciation on equipment for the year is $32,000.

Evaluate the retail method for estimating ending inventory.

Recognize the effects of errors in inventory accounting on financial statements.

Understand the implications of inventory errors on financial statements.

Compute the estimated cost of ending inventory using the gross profit method.

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Definitions:

Weak Situation

A type of environmental context where norms, expectations, and roles are vague or ambiguous, leading to greater variability in individuals' behaviors.

Situationism

A theory within psychology that suggests human behavior is largely determined by the surrounding context or situation rather than by personal characteristics or traits.

Unstructured Conversation

A type of dialogue that does not follow a predetermined format or topic, allowing for free-flowing and spontaneous communication.

Dependable

Capable of being relied upon; showing reliability and consistency in actions and behavior.