|
Sweeney & Associates, a large marketing firm, adjusts its accounts at the end of each month. The following information is available for the year ending December 31, 2011: |
| 1. |
A bank loan had been obtained on December 1. Accrued interest on the loan at December 31 amounts to $1,220. No interest expense has yet been recorded. |
| 2. |
Depreciation of the firm’s office building is based on an estimated life of 25 years. The building was purchased in 2007 for $320,000. |
| 3. |
Accrued, but unbilled, revenue during December amounts to $58,000. |
| 4. |
On March 1, the firm paid $1,300 to renew a 12 month insurance policy. The entire amount was recorded as Prepaid Insurance. |
| 5. |
The firm received $14,000 from the King Biscuit Company in advance of developing a six month marketing campaign. The entire amount was initially recorded as Unearned Revenue. At December 31, $3,000 had actually been earned by the firm. |
| 6. |
The company’s policy is to pay its employees every Friday. Since December 31 fell on a Wednesday, there was an accrued liability for salaries amounting to $1,800. |
| a. |
Record the necessary adjusting journal entries on December 31, 2011. (Do not round your intermediate calculations. Round your answers to the nearest whole dollar. Omit the “$” sign in your response.) |