Perez Company Was Founded in 2012 and Engaged in the Following

question 21

Essay

Perez Company was founded in 2012 and engaged in the following transactions:
1.issued common stock for cash
2.purchased supplies on account
3.collected cash from a customer for services to be provided over a period of 1 year
4.paid a cash dividend to stockholders
5.purchased a 2-year fire insurance policy
6.provided services to customers on account
7.collected cash from accounts receivable
8.paid cash for various operating expenses
9.paid rent in advance for 3 months at a time
Required:
a)For which of these transactions would adjusting entries be required at the end of the year?
b)Explain the reason why adjusting entries are required before financial statements can be prepared.

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Definitions:

Tax Revenue

The income that is gained by governments through taxation, which is used to fund public services and government obligations.

Organized Crime

Crime committed by structured groups typically involving the provision of illegal goods and services.

Internet Gambling

Placing bets or wagers on games of chance or skill, typically using the internet or other forms of digital communication.

Billion Dollars

A monetary unit equal to one thousand million dollars, often used to indicate a vast amount of wealth or cost.