Prepare the appropriate adjusting entry(s)

Ronald Rackets Corporation pays there employees on the 5th and 20th of every month. On December 31, 2012 Ronald Rackets recognized $30,000 of accrued wages expense for work performed by employees for the period beginning December 21, 2012 to the current date of December 31, 2012

Wage Expense $30,000

Wage Payable $30,000

On January 5th 2013 Ronald Rackets Employees were paid a total amount of $45,000 for the pay cycle ending January 5th 2013

Prepare the appropriate adjusting entry(s) that Ronald Rackets Corporation would make on January 5, 2013 to account for the cash payment made to employees. {Be Careful – This particular adjustment will affect 3 different accounts}

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Intention Incorporated manufactures and installs custom geared turbofans; a new technology used to increase the fuel economy of modern jet airliners. On February 1, 2013 The-Answer Airlines paid Intention Inc $15,000,000 cash to cover the custom manufacturing, delivery and installation costs for 10 sets of geared turbofans for the companies 10 jetliners. Intention Inc plans to complete The-Answer Airlines order by mid July of 2013.

Cash $15,000,000

Unearned Revenue $15,000,000

On May 31, 2013 Intention Incorporated delivered and installed 5 of the 10 sets of geared turbofans purchased by The-Answer Airlines back in February. The manufacturing cost incurred(i.e. value of the inventory) by Intention Incorporated for the fans installed totaled to $1,125,000($225,000 x 5 sets installed). Prepare the appropriate adjusting journal entry(s) that Intention Incorporated would make on May 31, 2013 to account for the delivery and installation of the 5 sets of geared turbofans. {Be Careful – This particular adjustment will affect 4 different accounts, and involves some minor calculations}.

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Cost of Goods Sold $1,125,000

Inventory $1,125,000

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