Question

Required: Record the Adjusting Entries i. Kristina Auditors is conducting the audit on Swan Productions. It is normal practice not bill or invoice the client until the audit is completed. By the end of the financial year 43 hours have been spent on the audit. The average rate is $370 per hour. Record the adjusting entry for Kristina Auditors. (Alternative: record the adjusting entry for Swan Productions) ii. Jon Ltd. invested $40,000 in a term deposit at Murray River Bank on 1 May 2019. Interest is received after one year and interest rates are 6%. Record the adjusting entry for Jon Ltd. when their financial year ends on 30 November 2019. (Alternative: record the adjusting entry for Murray River Bank) jii. On 1 March 2019, Andrew Ltd. accepts a $15,000, five percent, ten month note receivable. Record the adjusting entry for Andrew Ltd. when their financial year ends on 30 June 2019. iv. At Carin Industries salaries are paid and recorded weekly at the end of the week late on a Saturday evening for all work performed up to and including Saturday evening. The weekly salary bill is $36,000 for a six-day working week (Mon-Sat). Carin's accounting period ends on Tuesday evening. Record the adjusting entry. V. Amanda borrowed $120,000 from Eastpac Bank on 1 February 2019. Interest is paid after six months and interest rates are 8%. Record the adjusting entry for Amanda on 30 April 2019. (Alternative: record the adjusting entry for Eastpac Bank on 30 April)

Hi!

Can you please confirm if my answers are correct because my teacher did not provide the answers.

Thanks!

Answer 1

i	Accounts receivable	Dr	$ 15,910.00
	To Service Revenue	Cr		$ 15,910.00
	($370*43)
i- Alternative	Audit Fee	Dr	$ 15,910.00
	To Audit Fee Payable	Cr		$ 15,910.00
ii	Interest Receivable	Dr	$    1,400.00
	To Interest Income	Cr		$    1,400.00
	($40,000*6%*7/12)
ii- Alternative	Interest Income	Dr	$    1,400.00
	To Interest Payable	Cr		$    1,400.00
iii	Notes Receivable	Dr	$        250.00
	To Notes Revenue	Cr		$        250.00
	($15,000*5%*4/12)
iv	Salary Expenses	Dr	$ 12,000.00
	To Salary Payable	Cr		$ 12,000.00
	($36,000*3/6, ie for Mon and Tue))
v	Interest Expenses	Dr	$    2,400.00
	To Eastpac Bank	Cr		$    2,400.00
	($120,000*8%*3/12)
v- Alternative	Loan Interest Receivable	Dr	$    2,400.00
	To Interest Income	Cr		$    2,400.00