60.1K

Verified Solution

Link Copied!

striants Kretz Corporation prepares monthly financial statements and therefore adjusts ts secounts at the end of every month. The following information is available for March 2017: Required: 1. For each of the following situations, identify and analyze the adjustments to be recorded on March 31, 2017. Do not found intermediate calculations. If required, round your final answers to the nearest dollar. a. Kretz Corporation takes out a 90-day, 0, $15,000 note on March 1, 2017, with interest and principal to be paid at maturity. Assume 300 deys a year Act My Operating Acounts Interest Payable Incre Inter Expanse Inc Statements) Balance Sheat only How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount bok blank. If the affect on a financial stacement item is negative, ie, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Stockholders' . Liabilities - Equity Revenues - Expenses -Income Cash 15, Notu Payable 15, Na Entry No Entry b. The asset account Office Supplies on Hand has a balance of $1,200 on March 1, 2017. During March. Kretz adds $750 to the account for purchases during the period. A count of the supplies on hand at the end of March indicates a balance of $1,370. Actity Nccounts Statement's) O co this entry wifect the accounting equatic If financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, ie, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Stockholders' ANNA - Liabilities + Equity - Expenses - Income c. The company purchased office equipment last year for $62,600. The couloment has an estimated useful life of six years and an estimated salvace value of $5,000. Use straight line method of depreciation. Activity Accounts Statements) How does this entry affect the counting equation? If a financial statement item is not affected, select 'No Entry' and leave the amount box blank If the effect on a financial statement item is regative, le, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets = Liabilities + Equity Revenues - Expenses = Income count is d. The company's plant operates seven days per week with a daily payroll of $950. Wage earners are paid every Sunday. The last day of the month is Friday, March 31. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets - Llabilities + Equity Revenues - Expenses = Income e. The company rented an idle warehouse to a neighboring business on February 1, 2017, at a rate of $2,500 per month. On this date, Kretz Corporation recorded Rent Collected in Advance for six months' rent received in advance. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets = Liabilities + Equity Revenues Expenses = Income f. On March 1, 2017, Kretz Corporation recorded a liability account, Customer Deposits, for $4,800. This sum represents an amount that a customer paid in advance and that Kretz will earn evenly over a four-month period. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenues - Expenses = Income Net 9. Based on its income for the month, Kretz Corporation estimates that federal income taxes for March amount to $3,900. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenues - Expenses = Income Net 2. Assume that Kretz reports income of $23,000 before any of the adjustments. What net income will Kretz report for March? striants Kretz Corporation prepares monthly financial statements and therefore adjusts ts secounts at the end of every month. The following information is available for March 2017: Required: 1. For each of the following situations, identify and analyze the adjustments to be recorded on March 31, 2017. Do not found intermediate calculations. If required, round your final answers to the nearest dollar. a. Kretz Corporation takes out a 90-day, 0, $15,000 note on March 1, 2017, with interest and principal to be paid at maturity. Assume 300 deys a year Act My Operating Acounts Interest Payable Incre Inter Expanse Inc Statements) Balance Sheat only How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry and leave the amount bok blank. If the affect on a financial stacement item is negative, ie, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Stockholders' . Liabilities - Equity Revenues - Expenses -Income Cash 15, Notu Payable 15, Na Entry No Entry b. The asset account Office Supplies on Hand has a balance of $1,200 on March 1, 2017. During March. Kretz adds $750 to the account for purchases during the period. A count of the supplies on hand at the end of March indicates a balance of $1,370. Actity Nccounts Statement's) O co this entry wifect the accounting equatic If financial statement item is not affected, select "No Entry and leave the amount box blank. If the effect on a financial statement item is negative, ie, a decrease, be sure to enter the answer with a minus sign Balance Sheet Income Statement Stockholders' ANNA - Liabilities + Equity - Expenses - Income c. The company purchased office equipment last year for $62,600. The couloment has an estimated useful life of six years and an estimated salvace value of $5,000. Use straight line method of depreciation. Activity Accounts Statements) How does this entry affect the counting equation? If a financial statement item is not affected, select 'No Entry' and leave the amount box blank If the effect on a financial statement item is regative, le, a decrease, be sure to enter the answer with a minus sign. Remember: if a contra increased, it will have the effect of decreasing the corresponding financial statement item. Balance Sheet Income Statement Stockholders Net Assets = Liabilities + Equity Revenues - Expenses = Income count is d. The company's plant operates seven days per week with a daily payroll of $950. Wage earners are paid every Sunday. The last day of the month is Friday, March 31. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets - Llabilities + Equity Revenues - Expenses = Income e. The company rented an idle warehouse to a neighboring business on February 1, 2017, at a rate of $2,500 per month. On this date, Kretz Corporation recorded Rent Collected in Advance for six months' rent received in advance. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Net Assets = Liabilities + Equity Revenues Expenses = Income f. On March 1, 2017, Kretz Corporation recorded a liability account, Customer Deposits, for $4,800. This sum represents an amount that a customer paid in advance and that Kretz will earn evenly over a four-month period. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenues - Expenses = Income Net 9. Based on its income for the month, Kretz Corporation estimates that federal income taxes for March amount to $3,900. Activity Accounts Statement(s) How does this entry affect the accounting equation? If a financial statement item is not affected, select "No Entry" and leave the amount box blank. If the effect on a financial statement item is negative, i.e, a decrease, be sure to enter the answer with a minus sign. Balance Sheet Income Statement Stockholders' Assets = Liabilities + Equity Revenues - Expenses = Income Net 2. Assume that Kretz reports income of $23,000 before any of the adjustments. What net income will Kretz report for March

Answer & Explanation Solved by verified expert

See Answer