PART III — ADJUSTING ENTRIES
The trial balance of Throneburg Corporation reported the following balances for selected accounts on November 30, 2010:
|Prepaid Insurance||$12,000||Unearned Revenue||$ 4,800|
|Accumulated Depreciation||6,600||Interest Payable||450|
Instructions: Using the additional information given below, prepare the appropriate monthly adjusting entries at November 30. Show computations.
A. Revenue for services rendered to customers, but not yet billed, totaled $6,000 on November 30.
B. The note payable is a 9%, 1 year note issued September 1, 2010.
C. The equipment was purchased on January 2, 2009, for $60,000. It has an estimated life of 10 years and an estimated salvage value of $6,000. Throneburg uses the straight-line depreciation method.
D. An insurance policy was acquired on June 30, 2010; the premium paid for 2 years was $14,400.
E. Throneburg received $4,800 fees in advance from a customer on November 1, 2010. Three- fourths of this amount was earned by November 30.
PART IV — INVENTORY
Elston Company had a beginning inventory of 200 units at a cost of $12 per unit on August 1. During the month, the following purchases and sales were made.
August 4 250 units at $13 August 7 150 units
August 15 350 units at $15 August 11 100 units
August 28 200 units at $14 August 17 250 units
August 24 200 units
Elston uses a periodic inventory system.
Determine ending inventory and cost of goods sold under (a) average cost, (b) FIFO, and (c) LIFO.
PART V — DEPRECIATION
Gilbert Company purchased equipment for $800,000 cash on January1, 2009. The estimated life is 5 years or 1,000,000 units; salvage value is estimated at $40,000. Actual activity was 180,000 units in 2009, and 200,000 units in 2010.
Instructions: Compute the annual depreciation expense for 2009 and 2010, and book value at December31, 2010, under the following depreciation methods:(a) units-of-activity,(b) straight- line, and (c) double-declining-balance.(use tables to show calculations)
PART VI — DIVISION OF PARTNERSHIP NET INCOME (LOSS)
Jeff and Paul have formed a partnership and are interested in seeing the results of various income and loss sharing arrangements before they finalize their partnership agreement. Jeff and Paul will have beginning capital balances of $150,000 and $300,000, respectively.
Instructions: Prepare a schedule indicating the amounts to be debited or credited to the capital accounts in each of the following independent situations. (Be sure to designate debit (dr) or credit (cr) in Jeff’s and Paul’s totals for each situation (in field in parenthesis)!)(Remember–the grand total in each situation cannot exceed the total Net Income for each situation)