1 answer

Charger Inc. had the following items that require adjusting entries at the end of the year....

Question:

Charger Inc. had the following items that require adjusting entries at the end of the year. a. Charger pays its employees $3,General Journal General Journal Instructions PAGE 1 GENERAL JOURNAL IMPACT ON FINANCIAL STATEMENTS BALANCE SHEET INCOME STATE

Charger Inc. had the following items that require adjusting entries at the end of the year. a. Charger pays its employees $3,000 every Friday for a 5-day work week. This year December 31 falls on a Wednesday. b. Charger earned income of $720,000 for the year for tax purposes. Its effective tax rate is 35%. These taxes must be paid by April 15 of next year. C. Charger borrowed $360,000 with a note payable dated August 1. This note specifies 6%. The interest and principal are due on March 31 of the following year. d. Charger's president earns a bonus equal to 15% of income in excess of $610,000. Income for the year was $720,000. This bonus is paid in May of the following year and any expense is charged to wages expense. Required: Prepare the adjusting journal entries to record these transactions at the end of the current year.
General Journal General Journal Instructions PAGE 1 GENERAL JOURNAL IMPACT ON FINANCIAL STATEMENTS BALANCE SHEET INCOME STATEMENT DATE POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY REVENUE EXPENSES NET INCOME ACCOUNT TITLE Adjusting Entries

Answers

BALANCE SHEET INCOME STATEMENT
Date Account Title Post Ref. Debit Credit Assets Liabilities Equity Revenue Expenses Net Income
a Wages Expense $1,800 $1,800 -$1,800
Wages Payable $1,800 $1,800
(To record accrued wages) ($3,000 x 3/5)
b Income Tax Expense $252,000 $252,000 -$252,000
Income Tax Payable $252,000 $252,000
(To record accrued income taxes) ($720,000 x 35%)
c Interest Expense $9,000 $9,000 -$9,000
Interest Payable $9,000 $9,000
(To record accrued interest) ($360,000 x 6% x 5/12)
d Wages Expense $16,500 $16,500 -$16,500
Wages Payable $16,500 $16,500
(To record accrued wages) [($720,000 - $610,000) x 15%]
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