Accounting : Adjusting Entry, Revenue, Expenses and Trial Balance
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1) Garcia Corporation received cash of $9,000 on August 1, 1998 for
one year's rent in advance and recorded the transaction with a
credit to Rent Revenue. The December 31, 1998 adjusting entry is
a. debit Rent Revenue and credit Unearned Rent, $3,750.
b. debit Rent Revenue and credit Unearned Rent, $5,250.
c. debit Unearned Rent and credit Rent Revenue, $3,750.
d. debit Cash and credit Unearned Rent, $5,250.
2) In November and December 1998, Kay Co., a newly organized magazine
publisher received $90,000 for 1,000 three-year subscriptions at $30
per year, starting with the January 1999 issue. Kay included the
entire $90,000 in its 1998 income tax return. What amount should
Kay report in its 1998 income statement for subscriptions revenue?
a. $0.
b. $5,000.
c. $30,000.
d. $90,000.
3) Porter Corp. reports operating expenses in two categories: (1)
selling and (2) general and administrative. The adjusted trial
balance at December 31, 1998, included the following expense
accounts:
Accounting and legal fees $140,000
Advertising 120,000
Freight-out 75,000
Interest 60,000
Loss on sale of long-term investments 30,000
Officers' salaries 180,000
Rent for office space 180,000
Sales salaries and commissions 110,000
One-half of the rented premises is occupied by the sales department.
How much of the expenses listed above should be included in Porter's
selling expenses for 1998?
a. $230,000.
b. $305,000.
c. $320,000.
d. $395,000.
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Solution Summary
Adjusting Entries, Revenue, Expenses and Trial Balance are investigated.
Solution Preview
1). B
debit Rent Revenue and credit Unearned Rent, $5,250. (7 months of rent ...
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