Answer to Question #296826 in Accounting for Shikha

Question

1. Determine the original historical cost of the property and equipment reported in Microsoft Corporation’s balance sheet.
2. Four types of adjusting entries are illustrated in Exhibit 4-1. Explain which type of adjusting entry resulted in the company’s accrued compensation figure.
3. Explain why Microsoft Corporation reports unearned revenue in its balance sheet. Why might the company report short-term unearned revenue separately from long-term unearned revenue?

Answer 1

1. the original historical cost of the property and equipment reported in Microsoft Corporation’s balance sheet:

2.

the company accrues to others: debit other income and expenses credit settlements with various debtors and creditors.

3.Most likely, these are expected receipts from debtors in the near future. The company just wants to show the stability of the receipt of funds. Separates from long-term unearned revenue to show also that revenues are coming soon.