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    Conti Company Preparing Adjusting Entries

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    On June 30, the end of the current fiscal year, the following information is available to Conti Company's accountants for making adjusting entries:
    a. Among the liabilities of the company is a mortgage payable in the amount of $260,000. On June 30, the accrued interest on this mortgage amounted to $13,000.
    b. On Friday, July 2, the company, which is on five-day workweek and pays employees weekly, will pay its regular salaried employees $18,700.
    c. On June 29, the company completed negotiations and signed a contract to provide monthly services to a new client at an annual rate of $7,200.
    d. The supply account shows a beginning balance of $1,615 and purchases during the year of $4,115. The end-of-year inventory reveals supplies on hand of $1,318.
    e. The Prepaid insurance account shows the following entries on June 30:
    Beginning balance $1,620
    January 1 2,900
    May 1 3,366

    The beginning balance represents the unexpired portion of a on0year policy purchased in April of the previous year. The January 1 entry represents a new one-year policy, and the May 1 entry represents the additional coverage of three-year policy.

    f. The following table contains the cost and annual depreciation for buildings and equipment, all of which were purchased before the current year:

    Account Cost Annual Depreciation
    Buildings $170,000 $7,300
    Equipment 218,000 20,650

    g. On June 1, the company completed negotiations with another client and accepted an advance of $21,600 for services to be performed in the next year. The $21,600 for services to be performed in the next year. The $21,600 was credited to unearned service revenue.
    h. The company calculates that as of June 30 it had earned $4,500 on a $7,500 contract that will be completed and billed in August.

    Required:
    1. Prepare adjusting entries for each item listed above
    2. Explain how the conditions for revenue recognition are applied to transactions C & H.

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    https://brainmass.com/business/the-adjusting-process/conti-company-preparing-adjusting-entries-424965

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    Anna, 108710

    On June 30, the end of the current fiscal year, the following information is available to Conti Company's accountants for making adjusting entries:
    a. Among the liabilities of the company is a mortgage payable in the amount of $260,000. On June 30, the accrued interest on this mortgage amounted to $13,000.
    b. On Friday, July 2, the company, which is on five-day workweek and pays employees weekly, will pay its regular ...

    Solution Summary

    The expert prepares adjusting entries for Conti Company.

    $2.19