Q1
A review of the ledger of a company at December 31, 2025, produces the following data pertaining to the preparation of annual adjusting entries:
(a) Salaries and Wages Payable, $0: Salaries are paid every Friday for the current week. Five employees receive a weekly salary of $800, and three employees earn a weekly salary of $700. December 31 is a Tuesday. Employees do not work weekends. All employees worked the last 2 days of December.
(b) Unearned Rent Revenue, $60,000: The company had several lease contracts during the year as shown below:
(c) Notes Receivable, $90,000: This is a 6-month note, dated November 1, 2025, with a 6% interest rate.
Instructions:
Prepare the adjusting entries at December 31, 2025. Show all computations.
Q2
Acme Company prepares monthly financial statements. Below are listed some selected accounts and their balances on the September 30 trial balance before any adjustments have been made for the month of September.
ACME COMPANY
Trial Balance (Selected Accounts)
September 30, 2025
_____________________________________________________________________________
(Note: Debit column does not equal credit column because this is a partial listing of selected account balances.)
An analysis of the account balances by the company’s accountant provided the following additional information:
1. A physical count of office supplies revealed $1,000 on hand on September 30.
2. A two-year life insurance policy was purchased on September 1 for $4,800.
3. Office equipment depreciates $3,000 per year.
4. The amount of rent received in advance that remains unearned at September 30 is $300.
Instructions:
Using the information given, prepare the adjusting entries that should be made by Acme Company on September 30.
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