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Kim Said:

accounting assignment help wanted?

We Answered:

(a.) In Income statement, that transaction will increase your Purchases.

Entry:

Debit: Purchases $12,000
Credit: Accounts Payable $12,000

In Balance Sheet, that transaction will increase your Accounts Payable.

The same entry above. Purchases is Income Statement item while Accounts Payable is Balance Sheet item.

(b.) The entry will be:

Debit: Cash $1,515
Credit: Sales $1,106
Credit: Gains $409 (Company may use different account title)

Balance Sheet increase in Cash and Income Statement increase in Revenue.

(c) Accrual Basis: Charge the payment for past month in Insurance Expense ($7,500) then the remaining is charge to Prepaid Insurance ($15,000).

Income Statement: Insurance Expense is deducted to Gross Profit to arrive in correct Net Income.

Balance Sheet: Prepaid Insurance is now part of the Current Asset.

(d.) Not sure but allow me to try. :)

It depends on the installment agreement between the company and bank. Amortize the amount to be paid every year (If it’s annual instalment) considering the interest charged by the bank.

Rene Said:

A Few Accounting Questions?

We Answered:

For the first question, the accountant is correct - the revenue for the nine issues to be supplied in the next reporting period should be deferred until that time (revenue recognition principle). The matching principle also applies, as the revenue for those issues should be matched with the costs of providing them.

For the second question, the balance sheet at June 30, 2011 should reflect the amount of the unexpired portion of the policy (27 months worth), and 9 months worth of the policy should be expensed. If the entire amount remains as prepaid, both profit and assets would be overstated. If the entire amount had been charged to expense, the adjusting entry should DR Prepaid Insurance and CR Insurance Expense for 27 months worth of the policy.

Marie Said:

For Canadian Workers: Is EI Program working for Canadians?

We Answered:

E.I. doesn't gaurantee your income level. It is there for those that temporarily lose their employment altogether. One of the problems that is faced by the program are the multitude of people that abuse the system in an effort to get free money.