QS 3-5 (Algo) Prepaid (deferred) expenses adjustments LO P1 For each separate case below, follow the three-step process

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Qs 3 5 Algo Prepaid Deferred Expenses Adjustments Lo P1 For Each Separate Case Below Follow The Three Step Process 1 (47.9 KiB) Viewed 30 times

Qs 3 5 Algo Prepaid Deferred Expenses Adjustments Lo P1 For Each Separate Case Below Follow The Three Step Process 2 (51.59 KiB) Viewed 30 times

QS 3-5 (Algo) Prepaid (deferred) expenses adjustments LO P1 For each separate case below, follow the three-step process for adjusting the prepaid asset account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Prepaid Insurance. The Prepaid Insurance account has a $6,400 debit balance to start the year. A review of insurance policies shows that $1,750 of unexpired insurance remains at year-end. Prepaid Insurance Step 1: Determine what the current account balance equals. 0 Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. b. Prepaid Insurance. The Prepaid Insurance account has a $7,590 debit balance at the start of the year. A review of insurance policies shows $1,720 of insurance has expired by year-end. Step 1: Determine what the current account balance equals. Prepaid Insurance 0 Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. c. Prepaid Rent. On September 1 of the current year, the company prepaid $44,400 for two years of rent for facilities being occupied that day. The company debited Prepaid Rent and credited Cash for $44,400. Prepaid Rent Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. 0
For each separate case below, follow the three-step process for adjusting the Accumulated Depreciation account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Assume no other adjusting entries are made during the year. a. Accumulated Depreciation: The Krug Company's Accumulated Depreciation account has a $21,000 balance to start the year. A review of depreciation schedules reveals that $23,600 of depreciation expense must be recorded for the year. Accumulated depreciation Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. b. Accumulated Depreciation: The company has only one plant asset (truck) that it purchased at the start of this year. That asset had cost $59,000, had an estimated life of five years, and is expected to have zero value at the end of the five years. The company uses straight line depreciation method to calculate its depreciation. Accumulated depreciation -Truck Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. c. Accumulated Depreciation: The company has only one plant asset (equipment) that it purchased at the start of this year. That asset had cost $62,000, had an estimated life of seven years, and is expected to be valued at $13,000 at the end of the seven years. The company uses straight line depreciation method to calculate its depreciation. Accumulated depreciation --Equipment Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.