Essay on Adjusting Entries

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ACC 500 Fall 2012
CASE 2 Adjusting Entries

Due Date: Wednesday Nov. 14

Submission of this assignment is made under the terms of our academic integrity code.

Team: _______________________________________________________

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
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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