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ACCT 2121 Presented below are the accounts and balances from the unadjusted trial balance of Hannity, Inc. at 12/31/11. All accounts have normal balances.

Accounts Payable                                                            3,900

Accounts Receivable                                                      8,800

Accumulated Depreciation                                          20,000

Advertising Expense                                                       5,300

Cash                                                                                      15,730

Contributed Capital                                                         20,000

Dividends                                                                            5,000

Equipment                                                                          81,000

Insurance Expense                                                          4,400

Notes Receivable                                                             40,000

Prepaid Advertising                                                        12,000

Prepaid Insurance                                                           6,000

Rent Expense                                                                    24,000

Retained Earnings                                                            37,000

Service Revenue                                                              210,000

Supplies                                                                               5,600

Unearned Service Revenue                                        15,000

Utility Expense                                                                  9,070

Wages Expense                                                                                89,000

 

The prepaid advertising is for monthly ads in a magazine. The first ad ran in September.

What is the required journal entry at 12/31/11?

a)            debit advertising expense, $3,000; credit advertising payable, $3,000

b)            debit advertising expense, $12,000; credit prepaid advertising, $12,000

c)            debit prepaid advertising $4,000; credit advertising expense, $4,000

d)            debit advertising expense, $4,000; credit prepaid advertising, $4,000


Question 3          ACCT 2121 Presented below are the accounts and balances from the unadjusted trial balance of O\'Brien, Inc. at 12/31/11. All accounts have normal balances.

Accounts Payable                                                            250

Accounts Receivable                                                      1,150

Accumulated Depreciation                                          11,000

Advertising Expense                                                       1,000

Cash                                                                                      8,530

Contributed Capital                                                         10,000

Dividends                                                                            3,000

Equipment                                                                          31,450

Notes Payable                                                                   5,000

Prepaid Advertising                                                        4,000

Prepaid Insurance                                                           600

Rent Expense                                                                    9,000

Retained Earnings                                                            13,000

Service Revenue                                                              47,900

Supplies                                                                               1,250

Unearned Service Revenue                                        430

Wages Expense                                                                                27,600

 

Employees worked during the last few days of December and haven\'t been paid.

5 employees worked 12 hours each. The employees earn $8 per hour.

What is the required journal entry at 12/31/11?

a)            debit wages expense, $480; credit wages payable, $480

b)            debit wages expense $60, credit wages payable $60

c)            No adjusting entry is necessary because the wages won\'t be paid until the next year.

d)            debit wages expense $28,080 , credit wages payable $28,080


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