Explore BrainMass

Explore BrainMass

    Journal entry and accrual basis accounting

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Can you help me with this assignment?

    During 2010, Lakeview Co. completed the following two transactions. The annual accounting period ends Dec. 31.

    a. On Dec 31, 2010, calculated the payroll, which indicates gross earnings for wages ($82,000), payroll deductions for income tax ($8,000), payroll deductions for FICA( $6,000), payroll deductions for American Cancer Society ($2000), employer contributions for FICA (matching), state unemployment taxes ($500), and federal unemployment taxes ($100). Employees were paid in cash, but these payments and the corresponding payroll deductions and employer taxes have not yet been recorded.

    b. Collected rent revenue of $3000 on Dec. 10, 2010, for office space that Lakeview rented to another business. The rent collected was for 30 days from Dec. 11, 2010, to Jan. 10, 2011, and was collected in full to Unearned Rent Revenue.

    What I need:

    1. The journal entries to record payroll on Dec. 31, 2010.
    2. The journal entry for the collection of rent on Dec. 10, 2010, and the adjusting journal entry on Dec. 31, 2010.
    3. Any liabilities related to these items that should be on the company's balance sheet at Dec. 31, 2010.
    4. Why does the accrual basis of accounting have more relevant information to financial analysts than the cash basis method?

    © BrainMass Inc. brainmass.com October 10, 2019, 3:21 am ad1c9bdddf

    Solution Summary

    Journal entry and accrual basis accounting is examined.