Curb Company completed the following transactions

during 2010 T
Curb Company completed the following transactions during 2010. The annual accounting period
ends December 31, 2010.Jan. 15 Recorded tax expense for the year in the amount of
$125,000. Current taxes payable were $93,000.31 Paid accrued interest expense in the amount
of $52,000.Apr. 30 Borrowed $550,000 from Commerce Bank; executed a 12-month, 12 percent
interest-bearing note payable.June 3 Purchased merchandise for resale at an invoice cost of
$75,820, on account.July 5 Paid June 3 invoice.Aug. 31 Signed contract to provide security
service to a small apartment complex and collected six months’ fees in advance amounting to
$12,000. (Record the collection in a way that will not require an adjusting entry at year-
end.)Dec. 31 Reclassified a long-term liability in the amount of $100,000 to a current liability
classification.31 Determined salary and wages of $85,000 earned but not yet paid December 31
(disregard payroll taxes).Required:1. Prepare journal entries for each of these transactions.2.
Prepare all adjusting entries required on December 31, 2010.3. Show how all of the liabilities
arising from these transactions are reported on the balance sheet at December 31, 2010.4. For
each transaction, state whether cash flow from operating activities is increased, decreased, or
there is no effect.View Solution:
Curb Company completed the following transactions during 2010 T
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