Selected Data from Olympia,Inc

question 102

Essay

Selected data from Olympia,Inc.'s accounting system are provided below.All balances are BEFORE year-end adjustments and all data relate to the year ended Dec.31,2011.Complete the chart below to show the balances in each of the accounts AFTER the appropriate adjustments have been made,using the following additional information:
a.The note was issued on October 31,2011 at 12%.Both interest and principal are due on April 1,2012.
b.The equipment was purchased on January 1,2010.It has a seven-year estimated useful life with a $5,000 estimated residual value.
c.$300 of the supplies were used during the year.
d.The prepaid insurance balance relates to a $7,200,12-month policy purchased on April 1,2011.
e.$20,000 of the unearned revenue is now earned.
f.The salaries expense account balance does not include $10,000 of employee salaries earned but unpaid.

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Definitions:

Insurance Settlement

An insurance settlement is the payment made by an insurance company to a claimant, policyholder, or a designated recipient as compensation for a covered loss or policy event.

Interest Rate

The percentage charged or paid for the use of money on a yearly basis.

Guaranteed

A commitment or assurance, often by a third party, that certain conditions will be fulfilled, including payments or the performance of contractual obligations.

Interest Rate

The rate at which a portion of money is applied as a fee for its loan, commonly expressed per annum.