Question

ABC Company has a preliminary figure for earnings of $500,000, for the year ended 31 December 2017. The company also has provided the following information in relation to its annual financial information.

a. The company has a bank loan outstanding for $400,000, which has been outstanding for the entire year. The interest has not been paid or recorded for the final quarter. Interest is based on an annual rate of 4%.

b. Property tax of $24,000 was paid in September, and were for the 12-month period starting on 1 October. The amount was expensed in September.

c. The office supplies account has a balance of $1,300. A physical count indicates $500 of office supplies on hand.

d. A customer paid $60,000 on an outstanding account receivable in December. This amount was credited to sales, in error.

e. Depreciation of equipment in the amount of $32,800 has not been recorded.

f. Accounting fees paid, in the amount of $15,200, were debited to dividends instead of the Accounting Fee Expense account.

g. A customer paid $50,000 as a deposit in June. This was credited to unearned revenue, but the transaction was completed in October, and the goods delivered. Cost of goods sold was correctly recorded at that time, but the unearned revenue was not changed.

h. At the beginning of the year, there was a balance of $4,480 in the prepaid insurance account, for a policy that will expire at the end of February 2018. During the year, a second policy for different coverage came into effect on June 1. This policy cost $9,540 and covers 18 months. The payment was debited to insurance expense when it was made.

i. No income tax has been recorded, but the tax rate is 25%.

Required:

Journalize each of the above transactions (Descriptions for each journal entry are not necessary).

Answer 1