CASE 2 Adjusting Entries
Due Date: Wednesday Nov. 14
Submission of this assignment is made under the terms of our academic integrity code.
Each adjustment is worth 3 points. There is no partial credit for individual entries. The summary table at the end is worth 8 points. The case is worth 50 points.
You are presented with the following information for Little Co. Consider all situations independently. The company has a 12/31 year end and each item should be considered as a possible adjusting entry. Please present each adjusting entry as you deem necessary in good form followed by a brief …show more content…
A9: Limited life Intangible assets of $40,000 are listed the unadjusted trial balance. These are being amortized at the rate of $10,000 per year. Amortization has been recorded through the quarter ended September 30.
Amortization expense for 3 months (10000/12*3)
A10: When analyzing Accounts Payable you discover invoices for inventory items that have been received and billed to you but have not yet been recorded in the amount of $6,000.
Increase in inventory by $6000
A11: Salaries earned but not yet paid on December 31 were $12,000.
Increase in salary expense by $12000
A12: The interest on notes payable that has been incurred but not yet paid totaled $1,500 and was not on the unadjusted trial balance.
Interest payable increased by $1500
A13: The company has been involved in lawsuit. You reviewed the legal file and the letter received from your attorney stating that is was