Center Company Is Completing the Accounting Cycle at the End

question 53

Not Answered

Center Company is completing the accounting cycle at the end of the annual accounting period,December 31,2011.No adjusting entries have been made during the year so three adjusting entries must be made at this date to update the accounts.The following accounts,selected from Center Company's chart of accounts,are to be used for this purpose.They are coded to the left for easy reference. $$\begin{array} { l l l l } \text { A. } & \text { Supplies expense } & \text { I. } & \text { Unearned rent } \\\text { B. } & \text { Supplies } & \text { J. } & \text { Rent expense } \\\text { C. } & \text { Interest receivable } & \text { K. } & \text { Wage expense } \\\text { D. } & \text { Equipment }&\text { L. } & \text { Depreciation expense } \\\text { E. } & \text { Accumulated depreciation } & \text { M. } & \text { Interest expense } \\\text { F. } & \text { Notes payable } & \text { N. } & \text { Interest revenue } \\\text { G. } & \text { Interest payable } & \text { O. } & \text { Rent revenue } \\\text { H. } & \text { Wages payable } & \text { P. } & \text { Some other account not listed }\end{array}$$

---

Definitions:

Subsidiary Entity

A company that is controlled by another company, often referred to as the parent company, through ownership of more than half of the subsidiary's voting stock.

Parent Entity

A business that controls one or more subsidiary companies.

Deferred Tax Asset

A financial item on a company's balance sheet that reduces future tax liabilities due to deductible temporary differences, losses, or credits.

Unrealised Profit

Profit that results from an increase in value of an asset that has not yet been sold and thus has not generated actual cash inflow.