The trial balance of Customer Choice Wholesale Company contained the accounts shown at December 31, the end of the company’s fiscal year.

$$\begin{array}{c} \textbf{CUSTOMER CHOICE WHOLESALE COMPANY}\\ \textbf{Trial Balance}\\ \textbf{December 31, 2014}\\ \end{array}$$

$$\begin{array}{lcc} &\underline{\textbf{Debit}}&\underline{\textbf{Credit}}\\[3pt] \text{Cash}&\text{\$\hspace{17pt}31,400}\\ \text{Accounts Receivable}&\text{\hspace{22pt}37,600}\\ \text{Inventory}&\text{\hspace{22pt}70,000}\\ \text{Land}&\text{\hspace{22pt}92,000}\\ \text{Buildings}&\text{\hspace{17pt}200,000}\\ \text{Accumulated Depreciation—Buildings}&&\text{\$\hspace{17pt}60,000}\\ \text{Equipment}&\text{\hspace{22pt}83,500}\\ \text{Accumulated Depreciation—Equipment}&&\text{\hspace{22pt}40,500}\\ \text{Notes Payable}&&\text{\hspace{22pt}54,700}\\ \text{Accounts Payable}&&\text{\hspace{22pt}17,500}\\ \text{Common Stock}&&\text{\hspace{17pt}160,000}\\ \text{Retained Earnings}&&\text{\hspace{22pt}67,200}\\ \text{Dividends}&\text{\hspace{22pt}10,000}\\ \text{Sales Revenue}&&\text{\hspace{17pt}922,100}\\ \text{Sales Discounts}&\text{\hspace{27pt}6,000}\\ \text{Cost of Goods Sold}&\text{\hspace{17pt}709,900}\\ \text{Salaries and Wages Expense}&\text{\hspace{22pt}51,300}\\ \text{Utilities Expense}&\text{\hspace{22pt}11,400}\\ \text{Maintenance and Repairs Expense}&\text{\hspace{27pt}8,900}\\ \text{Advertising Expense}&\text{\hspace{27pt}5,200}\\ \text{Insurance Expense}&\underline{\text{\hspace{27pt}4,800}}&\underline{\hspace{50pt}}\\ &\underline{\underline{\text{\$\hspace{1pt}}1,322,000}}&\underline{\underline{\text{\$\hspace{1pt}}1,322,000}}\\ \end{array}$$

Adjustment data:

 1. Depreciation is $8,000 on buildings and$7,000 on equipment. (Both are operating expenses.)
 2. Interest of $4,500 is due and unpaid on notes payable at December 31.
 3. Income tax due and unpaid at December 31 is$24,000.

Other data: $15,000 of the notes payable are payable next year.

Instructions

(d) Prepare a multiple-step income statement and a retained earnings statement for the year, and a classified balance sheet at December 31, 2014.

The unadjusted trial balance of Walton Anvils at December 31, 2018, and the data for the adjustments follow:

$$\begin{array}{c} \textbf{WALTON ANVILS}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{December 31, 2018} \end{array}$$

$$\begin{array}{lrr} {\textbf{Account Title}}&\textbf{Debit\hspace{6pt}}&\textbf{Credit\hspace{4pt}}\\ \text{Cash}&\text{\$\hspace{5pt}13,480}\\ \text{Accounts Receivable}\hspace{10pt}&\text{14,500}\\ \text{Prepaid Rent}&\text{2,320}\\ \text{Office Supplies}&\text{1,700}\\ \text{Equipment}&\text{23,000}\\ \text{Accumulated Depreciation-Equipment}&&\text{\$\hspace{10pt}1,000}\\ \text{Accounts Payable}&&\text{7,100}\\ \text{Salaries Payable}&&\text{}\\ \text{Unearned Revenue}&&\text{6,000}\\ \text{Common Stock}&&\text{24,000}\\ \text{Retained Earnings}&&\text{4,500}\\ \text{Dividends}&\text{4,600}\\ \text{Service Revenue}&&\text{19,500}\\ \text{Salaries Expense}&\text{2,500}\\ \text{Rent Expense}&\text{}\\ \text{Depreciation Expense-Equipment}&\text{}\\ \text{Supplies Expense }&\text{\underline{\hspace{38pt}}}&\text{\underline{\hspace{38pt}}}\\ \text{Total}&\underline{\underline{\$\hspace{5pt}\text{62,100}}}&\underline{\underline{\$\hspace{5pt}\text{62,100}}}\\ \end{array}$$

Adjustment data:

• a. Unearned Revenue still unearned at December 31, $1,800.
• b. Prepaid Rent still in force at December 31,$2,100.
• c. Office Supplies used, $1,500.
• d. Depreciation,$390.
• e. Accrued Salaries Expense at December 31, $200.

Requirements

1. Open the T-accounts using the balances in the unadjusted trial balance.
2. Complete the worksheet for the year ended December 31, 2018 (optional).
3. Prepare the adjusting entries, and post to the accounts.
4. Prepare an adjusted trial balance.
5. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form.
6. Prepare the closing entries, and post to the accounts.
7. Prepare a post-closing trial balance.
8. Calculate the current ratio for the company.

Prepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data.

E. depreciation on property plant and equipment, $18,000

The following information was taken from the records of Daughtry Cosmetics, Inc., at December 31, 2016:

$$\begin{array}{lrlr} \text{Prior-period adjustment—net of taxes}&&\text{Interest expense}&\$21,000\\ \quad\text{debit to Retained Earnings}&\$4,000&\text{Gain on lawsuit settlement}&6,000\\ \text{Income tax expense (savings):}&&\text{Dividend revenue}&12,000\\ \quad\text{Continuing operations }&27,600&\text{Treasury stock, common}&\\ \quad\text{Income from discontinued}&&\quad\text{(1,000 shares at cost)}&16,000\\ \quad\text{operations}&4,800&\text{General expenses}&70,900\\ \text{Loss on sale of plant assets}&10,000&\text{Sales revenue}&536,000\\ \text{Income from discontinued}&&\text{Retained earnings, beginning, }&\\ \quad\text{operations}&10,000&\quad\text{as originally reported}&196,000\\ \text{Preferred stock, 6\\\%, \$25 par,}&&\text{Selling expenses}&81,000\\ \quad\text{4,000 shares issued }&40,000&\text{Common stock, no par,}&\\ \text{Cost of goods sold}&302,000&\quad\text{21,000 shares authorized}&\\ \text{Dividends declared on common stock}&28,000&\quad\text{and issued}&350,000\\ \end{array}$$

Daughtry Cosmetics holds significant promise for carving a niche in its industry. A group of Irish investors is considering purchasing the company’s outstanding common stock. Daughtry’s stock is currently selling for $24 per share.

A BetterLife Magazine story predicted the company’s income is bound to grow. It appears that Daughtry can earn at least its current level of income for the indefinite future. Based on this information, the investors think that an appropriate investment capitalization rate for estimating the value of Daughtry’s common stock is 10%. How much will this belief lead the investors to offer for Daughtry Cosmetics? Will Daughtry’s existing stockholders be likely to accept this offer? Explain your answers.

The unadjusted trial balance of Guthrie Inn Company at December 31, 2018, and the data needed for the adjustments follow.

$$\begin{array}{c} \textbf{GUTHRIE INN COMPANY}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{December 31, 2018} \end{array}$$

$$\begin{array}{lrr} {\textbf{Account Title}}&\textbf{Debit\hspace{6pt}}&\textbf{Credit\hspace{4pt}}\\ \text{Cash}&\text{\$\hspace{7pt}13,500}\\ \text{Accounts Receivable}&\text{15,100}\\ \text{Prepaid Insurance}&\text{4,600}\\ \text{Office Supplies}&\text{800}\\ \text{Building}&\text{530,000}\\ \text{Accumulated Depreciation- Building}&&\text{\$\hspace{2pt}260,000}\\ \text{Accounts Payable}&&\text{1,710}\\ \text{Salaries Payable}\\ \text{Unearned Revenue}&&\text{3,600}\\ \text{Common Stock}&&\text{288,950}\\ \text{Dividends}&\text{2,340}\\ \text{Service Revenue}&&\text{15,500}\\ \text{Salaries Expense}&\text{2,800}\\ \text{Insurance Expense}\\ \text{Depreciation Expense- Building}\\ \text{Advertising Expense}&\text{620}\\ \text{Supplies Expense}&\text{\underline{\hspace{40pt}}}&\text{\underline{\hspace{40pt}}}\\ \text{Total}&\underline{\underline{\$\hspace{2pt}\text{569,760}}}&\underline{\underline{\$\hspace{2pt}\text{569,760}}}\\ \end{array}$$

Adjustment data at December 31 follow:

• a. As of December 31, Guthrie had $700 of Prepaid Insurance remaining.
• b. At the end of the month, Guthrie had$500 of office supplies remaining.
• c. Depreciation on the building is $1,200.
• d. Guthrie pays its employees weekly on Friday. Its employees earn$1,800 for a five-day workweek. December 31 falls on Wednesday this year.
• e. On November 20, Guthrie contracted to perform services for a client receiving $3,600 in advance. Guthrie recorded this receipt of cash as Unearned Revenue. As of December 31, Guthrie has$1,600 still unearned.

Requirements

1. Journalize the adjusting entries on December 31.
2. Using the unadjusted trial balance, open the accounts (use a four-column ledger) with the unadjusted balances. Post the adjusting entries to the ledger accounts.
3. Prepare the adjusted trial balance.
4. Assuming the adjusted trial balance has total debits equal to total credits, does this mean that the adjusting entries have been recorded correctly? Explain.

Bengal Company, which started operations on January 3, 2011, had the following subsequent transactions and events in its long-term investments.

2011
Jan. 5 Bengal purchased 15,000 shares (25% of total) of Bloch’s common stock for $187,500.
Aug. 1 Bloch declared and paid a cash dividend of$0.95 per share.
Dec. 31 Bloch’s net income for 2011 is $92,000, and the fair value of its stock is$12.90 per share.

2012
Aug. 1 Bloch declared and paid a cash dividend of $1.25 per share.
Dec. 31 Bloch’s net income for 2012 is$76,000, and the fair value of its stock is $13.55 per share.

2013
Jan. 8 Bengal sold all of its investment in Bloch for$204,750 cash.

Part 1
Assume that Bengal has a significant influence over Bloch with its 25% share.

Required
1. Prepare journal entries to record these transactions and events for Bengal.
2. Compute the carrying (book) value per share of Bengal’s investment in Bloch common stock as reflected in the investment account on January 7, 2013.
3. Compute the net increase or decrease in Bengal’s equity from January 5, 2011, through January 8, 2013, resulting from its investment in Bloch.

Part 2
Assume that although Bengal owns 25% of Bloch’s outstanding stock, circumstances indicate that it does not have a significant influence over the investee and that it is classified as an available-for-sale security investment.

Required
1. Prepare journal entries to record these transactions and events for Bengal. Also prepare an entry dated January 8, 2013, to remove any balance related to the fair value adjustment.
2. Compute the cost per share of Bengal’s investment in Bloch common stock as reflected in the investment account on January 7, 2013.
3. Calculate the net increase or decrease in Bengal’s equity from January 5, 2011, through January 8, 2013, resulting from its investment in Bloch.

Carrington Custom Cabinet Company uses a job order costing system with overhead applied based on direct labor cost. Inventory balances at the beginning of 2009 follow:

$$\begin{array}{lr}\text { Raw materials inventory } & \$ 25,000 \\ \text { Work in process inventory } & 30,000 \\ \text { Finished goods inventory } & 40,000\end{array}$$

The following transactions occurred during January: (a) Purchased materials on account for $40,000. (b) Issued materials to production totaling$ 30,000, 80 percent of which was traced to specific jobs and the remainder treated as indirect materials. (c) Payroll costs totaling $25,500 were recorded as follows:$ 15,000 for assembly workers 6,000 for factory supervision 2,000 for administrative personnel 2,500 for sales commissions (d) Recorded depreciation: $5,000 for machines,$ 2,000 for office copier. (e) Had $4,000 in insurance expire; allocated equally between manufacturing and administrative expenses. (f) Paid$ 8,500 in other factory costs in cash. (g) Applied manufacturing overhead at a rate of 150 percent of direct labor cost. (h) Completed all jobs but one; the job cost sheet for this job shows $7,000 for direct materials,$ 6,000 for direct labor, and $9,000 for applied overhead. (i) Sold jobs costing$ 60,000 during the period; the company uses cost-plus pricing with a markup of 35 percent.

Required:

1. Set up T-accounts, record the beginning balances, post the January transactions, and compute the final balance for the following accounts: Raw Materials Inventory Work in Process Inventory Finished Goods Inventory Cost of Goods Sold Manufacturing Overhead Selling and Administrative Expenses Sales Revenue Other accounts (Cash, Payables, etc.)
2. Determine how much gross profit the company would report during the month of January before any adjustment is made for the overhead balance.
3. Determine the amount of over- or underapplied overhead.
4. Compute adjusted gross profit assuming that any over- or underapplied overhead is adjusted directly to Cost of Goods Sold.

Prepare adjusting journal entries, as needed, considering the account balances excerpted from the unadjusted trial balance and the adjustment data.

C. remaining unearned service revenue, $1,200

The unadjusted trial balance of Watson Anvils at December 31, 2018, and the data for the adjustments follow:

$$\begin{array}{c} \textbf{WATSON ANVILS}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{December 31, 2018} \end{array}$$

$$\begin{array}{lrr} {\textbf{Account Title}}&\textbf{Debit\hspace{6pt}}&\textbf{Credit\hspace{4pt}}\\ \text{Cash}&\text{\$\hspace{5pt}13,560}\\ \text{Accounts Receivable}\hspace{10pt}&\text{17,000}\\ \text{Prepaid Rent}&\text{2,140}\\ \text{Office Supplies}&\text{2,800}\\ \text{Equipment}&\text{30,000}\\ \text{Accumulated Depreciation-Equipment}&&\text{\$\hspace{5pt}11,000}\\ \text{Accounts Payable}&&\text{7,200}\\ \text{Salaries Payable}&&\text{}\\ \text{Unearned Revenue}&&\text{5,600}\\ \text{Common Stock}&&\text{12,000}\\ \text{Retained Earnings}&&\text{17,600}\\ \text{Dividends}&\text{4,600}\\ \text{Service Revenue}&&\text{19,000}\\ \text{Salaries Expense}&\text{2,300}\\ \text{Rent Expense}&\text{}\\ \text{Depreciation Expense-Equipment}&\text{}\\ \text{Supplies Expense }&\text{\underline{\hspace{38pt}}}&\text{\underline{\hspace{38pt}}}\\ \text{Total}&\underline{\underline{\$\hspace{5pt}\text{72,400}}}&\underline{\underline{\$\hspace{5pt}\text{72,400}}}\\ \end{array}$$

Adjustment data: a. Unearned Revenue still unearned at December 31, $3,600. b. Prepaid Rent still in force at December 31,$2,000. c. Office Supplies used, $600. d. Depreciation,$400. e. Accrued Salaries Expense at December 31, $180.

Requirements

1. Open the T-accounts using the balances in the unadjusted trial balance.
2. Complete the worksheet for the year ended December 31, 2018 (optional).
3. Prepare the adjusting entries, and post to the accounts.
4. Prepare an adjusted trial balance.
5. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form.
6. Prepare the closing entries, and post to the accounts.
7. Prepare a post-closing trial balance.
8. Calculate the current ratio for the company.

On December 1, 2014, Harrisen Company had the account balances shown below.

$$\begin{array}{lclc} &\underline{\textbf{Debit}}&&\underline{\textbf{Credit}}\\[3pt] \text{Cash}&\text{\$\hspace{5pt}4,800}&\text{Accumulated Depreciation—Equipment}&\text{\$\hspace{5pt}1,500}\\ \text{Accounts Receivable}&\text{\hspace{10pt}3,900}&\text{Accounts Payable}&\text{\hspace{10pt}3,000}\\ \text{Inventory}&\text{\hspace{5pt}1,800*}&\text{Common Stock}&\text{\hspace{5pt}10,000}\\ \text{Equipment}&\underline{\text{\hspace{5pt}21,000}}&\text{Retained Earnings}&\underline{\text{\hspace{5pt}17,000}}\\ &\underline{\underline{\text{\$\hspace{1pt}31,500}}}&&\underline{\underline{\text{\$\hspace{1pt}31,500}}}\\ \end{array}$$

*(3,000 x $0.60)

The following transactions occurred during December.

Dec.  3 Purchased 4,000 units of inventory on account at a cost of$0.72 per unit.
      5 Sold 4,400 units of inventory on account for $0.90 per unit. (It sold 3,000 of the$0.60 units and 1,400 of the $0.72.)
      7 Granted the December 5 customer$180 credit for 200 units of inventory returned costing $150. These units were returned to inventory.
     17 Purchased 2,200 units of inventory for cash at$0.80 each.
     22 Sold 2,000 units of inventory on account for $0.95 per unit. (It sold 2,000 of the$0.72 units.)

Adjustment data:

1. Accrued salaries and wages payable $400.
2. Depreciation on equipment$200 per month.
3. Income tax expense was $215, to be paid next year.

Instructions

(a) Journalize the December transactions and adjusting entries, assuming Harrisen uses the perpetual inventory method.

(b) Enter the December 1 balances in the ledger T-accounts and post the December transactions. In addition to the accounts mentioned above, use the following additional accounts: Income Taxes Payable, Salaries and Wages Payable, Sales Revenue, Sales Returns and Allowances, Cost of Goods Sold, Depreciation Expense, Salaries and Wages Expense, and Income Tax Expense.

The trial balance of Buse’s Fashion Center contained the accounts below at November 30, the end of the company’s fiscal year.

$$\begin{array}{c} \textbf{BUSE’S FASHION CENTER}\\ \textbf{Trial Balance}\\ \textbf{November 30, 2014}\\ \end{array}$$

$$\begin{array}{lcc} &\underline{\textbf{Debit}}&\underline{\textbf{Credit}}\\[3pt] \text{Cash}&\text{\$\hspace{7pt}37,700}\\ \text{Accounts Receivable}&\text{\hspace{12pt}33,700}\\ \text{Inventory}&\text{\hspace{12pt}43,000}\\ \text{Supplies}&\text{\hspace{17pt}8,800}\\ \text{Equipment}&\text{\hspace{7pt}143,000}\\ \text{Accumulated Depreciation—Equipment}&&\text{\$\hspace{7pt}41,000}\\ \text{Notes Payable}&&\text{\hspace{12pt}62,000}\\ \text{Accounts Payable}&&\text{\hspace{12pt}17,800}\\ \text{Common Stock}&&\text{\hspace{12pt}80,000}\\ \text{Retained Earnings}&&\text{\hspace{12pt}30,000}\\ \text{Dividends}&\text{\hspace{12pt}12,000}\\ \text{Sales Revenue}&&\text{\hspace{7pt}757,200}\\ \text{Sales Returns and Allowances}&\text{\hspace{17pt}6,200}\\ \text{Cost of Goods Sold}&\text{\hspace{7pt}505,400}\\ \text{Salaries and Wages Expense}&\text{\hspace{7pt}110,000}\\ \text{Advertising Expense}&\text{\hspace{12pt}26,400}\\ \text{Utilities Expense}&\text{\hspace{12pt}14,000}\\ \text{Maintenance and Repairs Expense}&\text{\hspace{12pt}12,100}\\ \text{Freight-Out}&\text{\hspace{12pt}11,700}\\ \text{Rent Expense}&\underline{\text{\hspace{12pt}24,000}}&\underline{\hspace{40pt}}\\ &\underline{\underline{\text{\$\hspace{1pt}}988,000}}&\underline{\underline{\text{\$\hspace{1pt}}988,000}}\\ \end{array}$$

Adjustment data:

 1. Store supplies on hand total $4,000.
 2. Depreciation is$14,000 on the store equipment and $6,000 on the delivery equipment.
 3. Interest of$4,400 is accrued on notes payable at November 30.
 4. Income tax due and unpaid at November 30 is $3,000.

Other data:$24,000 of notes payable are due for payment next year.

Instructions

(b) Prepare T-accounts for all accounts used in part (a). Enter the trial balance amounts into the T-accounts and post the adjusting entries.

Zeidman Security Services Co. offers security services to business clients. Complete the following end-of-period spreadsheet (work sheet) for Zeidman Security Services Co.

$$\begin{array}{c} \textbf{Zeidman Security Services Co.}\\ \textbf{End-of-Period Spreadsheet (Work sheet)}\\ \textbf{For the Year Ended July 31,2012}\\ \end{array}$$

$$\begin{array}{lccc} \hline&\textbf{Adjusted}&\textbf{Income}&\textbf{Balance}\\ &\underline{\textbf{Trial Balance}}&\underline{\textbf{Adjustment}}&\underline{\textbf{Trial balance}}\\ \textbf{Account Title}&\textbf{Dr.}\quad\quad\quad\textbf{Cr.}&\textbf{Dr.}\quad\quad\quad\textbf{Cr.}&\textbf{Dr.}\quad\quad\quad\textbf{Cr.} \\ \hline\text{Cash}&12\quad\quad\quad\quad\quad\\ \text{Accounts Receivable}&89\quad\quad\quad\quad\quad\\ \text{Supplies}&3\quad\quad\quad\quad\quad\\ \text{Prepaid Insurance}&4\quad\quad\quad\quad\quad\\ \text{Land}&100\quad\quad\quad\quad\quad\\ \text{Equipment}&40\quad\quad\quad\quad\quad\\ \text{Accum. Depr.- Equipment}&8\\ \text{Accounts Payable}&36\\ \text{Wages Payable}&1\\ \text{Alex Zeidman, Capital}&170\\ \text{Alex Zeidman, Drawing}&8\quad\quad\quad\quad\quad\\ \text{Fees Earned}&99\\ \text{Wages Expense}&21\quad\quad\quad\quad\quad\\ \text{Rent Expense}&12\quad\quad\quad\quad\quad\\ \text{Insurance Expense}&8\quad\quad\quad\quad\quad\\ \text{Utilities Expense}&6\quad\quad\quad\quad\quad\\ \text{Supplies Expense}&5\quad\quad\quad\quad\quad\\ \text{Depreciation Expense}&4\quad\quad\quad\quad\quad\\ \text{Miscellaneous Expense}&2\quad\quad\quad\quad\quad\\ \hline &314\quad\quad\quad314\\ \hline\hline \text{Net income (loss)} \end{array}$$

prepare the closing entries for Zeidman Security Services Co.

Pete's Tennis Shop has the following transactions related to its top-selling Wilson tennis racket for the month of August:

$$\begin{matrix} \text{Date} & \text{Transactions} & \text{Units} & \text{Cost per Unit} & \text{Total Cost}\\ \hline \text{August 1} & \text{Beginning inventory} & \text{8} & \text{\$160} & \text{\$1,280}\\ \text{August 4} & \text{Sale $(\$ 225 \text { each) }$} & \text{5} & \text{ } & \text{ }\\ \text{August 11} & \text{Purchase} & \text{10} & \text{150} & \text{1,500}\\ \text{August 13} & \text{Sale $(\$ 240 \text { each) }$} & \text{8} & \text{ } & \text{ }\\ \text{August 20} & \text{Purchase} & \text{10} & \text{140} & \text{1,400}\\ \text{August 26} & \text{Sale $(\$ 250 \text { each) }$} & \text{11} & \text{ } & \text{ }\\ \text{August 29} & \text{Purchase} & \text{11} & \text{130} & \underline{1,430}\\ \text{ } & \text{ } & \text{ } & \text{ } & \underline{\underline{\$5,610}}\\ \end{matrix}$$

1. Calculate ending inventory and cost of goods sold at August 31, using the specific identification method. The August 4 sale consists of rackets from beginning inventory, the August 13 sale consists of rackets from the August 11 purchase, and the August 26 sale consists of one racket from beginning inventory and 10 rackets from the August 20 purchase. 2. Using FIFO, calculate ending inventory and cost of goods sold at August 31. 3. Using LIFO, calculate ending inventory and cost of goods sold at August 31. 4. Using weighted-average cost, calculate ending inventory and cost of goods sold at August 31. 5. Calculate sales revenue and gross profit under each of the four methods. 6. Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory? Explain. 7. If Pete's chooses to report inventory using LIFO, record the LIFO adjustment.

Florida Palms Country Club adjusts its accounts monthly. Club members pay their annual dues in advance by January 4 . The entire amount is initially credited to Unearned Membership Dues. At the end of each month, an appropriate portion of this amount is credited to Membership Dues Earned. Guests of the club normally pay green fees before being allowed on the course. The amounts collected are credited to Green Fee Revenue at the time of receipt. Certain guests, however, are billed for green fees at the end of the month. The following information is available as a source for preparing adjusting entries at December 31 :

1. Salaries earned by golf course employees that have not yet been recorded or paid amount to $\$ 9,600$.
2. The Tampa University golf team used Florida Palms for a tournament played on December 30 of the current year. At December 31 , the $\$ 1,800$ owed by the team for green fees had not yet been recorded or billed.
3. Membership dues earned in December, for collections received in January, amount to $\$ 106,000$.
4. Depreciation of the country club's golf carts is based on an estimated life of 15 years. The carts had originally been purchased for $\$ 180,000$. The straight-line method is used. (Note: The clubhouse building was constructed in 1925 and is fully depreciated.)
5. A 12-month bank loan in the amount of $\$ 45,000$ had been obtained by the country club on November 1 . Interest is computed at an annual rate of 8 percent. The entire $\$ 45,000$, plus all of the interest accrued over the 12-month life of the loan, is due in full on October 31 of the upcoming year. The necessary adjusting entry was made on November 30 to record the first month of accrued interest expense. However, no adjustment has been made to record interest expense accrued in December.
6. A one-year property insurance policy had been purchased on March 1. The entire premium of $\$ 7,800$ was initially recorded as Unexpired Insurance.
7. In December, Florida Palms Country Club entered into an agreement to host the annual tournament of the Florida Seniors Golf Association. The country club expects to generate green fees of $\$ 4,500$ from this event.
8. Unrecorded Income Taxes Expense accrued in December amounts to $\$ 19,000$. This amount will not be paid until January 15 .

Instructions
b. Four types of adjusting entries are described at the beginning of the chapter. Using these descriptions, identify the type of each adjusting entry prepared in part a above.