双语中会(第八章).pptVIP

Content Current liability Advance Collections Contingencies Credit lines For example, first national bank give Matrix inc. to 1,000,000 committed credit line for each year. During 2010, Matrix inc. borrowed the money 600,000 for eight months. Annual commitment fee rate is 5%. What amount will Matrix record the commitment fee ? 400,000*5%+600,000*5%*4/12=30,000 adjusting entries ABC Company is a retailer of equipment. Consider the following adjustments on January 31: Wages earned by employees during January but not paid as of January 31 were $3,750. Dr. wages expense 3,750 Cr. Accrued wages payable 3,750 The company borrowed $100,000 from the bank on January 1. The principal and 9% interest are to be paid 1 year later. Make the adjusting entry about the interest for January. Dr. Interest expense 750 Cr. Accrued interest payable 750 adjusting entries On January 1, a corporation paid $3,000 cash to ABC Company as an advance rental for 3 months. On January 31, an adjustment is needed to recognize the rent revenue earned for January. Dr. Unearned rent revenue 1000 Cr. Rent revenue 1000 adjusting entries Income tax expense must be accrued on January income at a rate of 25% of income before taxes. the “pretax income” is 22,400 Income tax=22,400×25%=5,600 Dr. Income tax expense 5,600 Cr. Accrued income tax payable 5,600 Advances from customers Matrix Publications collects magazine subscriptions from customers at the time subscriptions are sold. Matrix collected advance $20 million during 2011. On December 31, the average subscription was one-fourth expired. ( in millions) When Advance Is Collected When Product Is Delivered ( in millions) When Advance Is Collected Cash 20 Unearned subscriptions revenue 20 When Product Is Delivered Unearned subscriptions revenue 5 Subscriptions revenue