BUSI 101 1nd Edition Lecture 9 Outline of Last Lecture I. Page 33 in Course PackII. Page 27 in Course PackOutline of Current Lecture I. Chapter 5 Reviewa. Adjusting Entries Problemsi. Deferrals vs. Accrualsb. Closing Entries PracticeII. Page 36 in Course PackIII. Introduction to Managerial Accountinga. Cost of Production ReportCurrent Lecture*Midterm 2/23Review Session 2/22Chapter 5Adjusting Entries:Deferrals – cash leadsExpense LiabilityAsset RevenueDepreciation Expense (E)Accrual Depreciation (XA)Accruals – cash lagsExpense Asset (Receivable)Liability (payable) RevenueThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Closing Entries:Net Income: Net Liability:Revenue RevenueExpense Retained Earnings (OE)Retained Earnings ExpensePage 363. A.Cash (A) 90,000Unearned Revenue (L) 90,000Unearned Revenue (L) 30,000Revenue (R) 30,000B.Salary Expense (E) 480,000Salary Payable (L) 480,000C.Prepaid Rent (A) 300,000Cash (A) 300,000Rent Expense (E) 50,000Prepaid Rent (A) 50,000D. No Entry4. a. Tenant:Prepaid Rent (A) 60,000Cash (A) 60,000b. Landlord:Cash (A) 60,000Unearned Rent (L) 60,000c. Tenant (12/31):Rent Expense (E) 40,000Prepaid Rent (A) 40,000d. Landlord (12/31):Unearned Rent (L) 40,000Rent Revenue (R) 40,00010. Cash (A)5,0006,3002000240090010001000750A/R (A)6,50080006300PPR (A)2000 10001000PPI (A)24004002000Supplies (A)24002000A/P (L)900 12002400S/P (L)10,000 10,000Notes Payable (L)4000Capital Stock (OE)3000Retained Earnings (OE)2300Supplies Expense (E)Salary Expense (E)1000Rent Expense (E)Sales (R)8000Insurance Expense (E)Tax Expense (E)750a) PPR (A) 2000Cash (A) 2000b) PPI (A) 2400Cash (A) 2400c) A/P (L) 900Cash (A) 900d) S/P (L) 4000Cash (A) 4000e) Sup. Exp. (E) 2400A/P (L) 2400f) Sal. Exp. (E) 1000Cash (A) 1000g) A/R (A) 8000Sales (R) 8000h) Cash (A) 6300A/R (A) 6300i) Tax Exp. (E) 750Cash (A) 750j) Rent Exp. (E) 1000PPR (A) 1000k) Ins. Exp. (E) 400PPI (A) 400l) Sal. Exp. (E) 1000S/P (L) 1000m) Sup. Exp. (E) 2000Supplies (A) 2000Trial Balance & Adjusted Trial BalanceAccount Debit Credit Adjusted Debit Adjusted CreditCash 3250 3250A/R 8200 8200PPR 2000 2000PPI 2400 2400Supplies 2400 400A/P 2700 2700S/P 0 1000N/P 4000 4000C.S. 3000 3000RE 2300 2300Sales 8000 8000Sup. Exp. 0 2000Sal. Exp. 1000 2000Rent Exp. 0 1000Ins. Exp. 0 400Tax Exp. 750 75020,000 20,000 21,000 21,000Income StatementSales: 8000Expenses:SUP 2000Sal. 2000Rent 1000Ins. 400 Tax 750 =NI 1850Statement of Retained EarningsBeginning Retained Earnings 2300+ Net Income 1850=Available RE 4150-Dividends Declared 0 =Ending Retained Earnings 4150Balance SheetAssets LiabilitiesCash 3250 A/P 2700A/R 8200 S/P 1000PPR 1000 N/P 4000PPI 2000SUP 400 C.S 300014850 RE 415014850Managerial Accounting: InternalThree types of firms:1. Service2. Merchandising3. ManufacturingThree cost elements:1. Direct Costs – materials forming an integral part of the finished product2. Direct Labor – labor expended upon the direct materials3. Factory Overhead – all manufacturing costs other than direct material and direct labor**Prime Costs = Direct Materials and Direct Labor**Conversion Costs = Direct Labor and Factory OverheadEx. Prime Cost=1000, Conversion Cost = 2800, Factory Overhead = 3x Direct MaterialsDM+DL = 1000FOHD+DL=2800FOHD-DM=1800FOHD=3DM3(DM)-1(DM)=18002DM=1800DM=900Answers: DM=900, DL=100, FOHD=2700Cost of Production Report:I. Basic Schedule:Beginning Materials+Materials Used=Materials Available-End MaterialsMaterials UsedII. Total Manufacturing CostsDM+DL+FOHD=TMCIII. Cost of Goods ManufacturedBeg. WIP+TMC=Available-End WIP=CGMIV. Cost of Goods SoldBeg. FG+CGM=Available-End FG=CGSV. Income StatementSales-CGS=Gross Profit-Op. Expense=Operating