ACCT 200 Lecture 8 Outline of Last Lecture I Adjustments II Depreciation III Classification IV Current Ratio V Quick Ratio Outline of Current Lecture I Quick Notes II Problem 3 5 III Problem 3 6 IV Problem 3 8 V Problem 3 9 VI Problem 3 10 VII Problem 3 12 Current Lecture I Quick Notes a Adjustment process this is stuff that is recorded at the end of the month b On homework 3 2 from last week the only thing that gets depreciated is the building These 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 c On homework 3 3 the note payable is due in 2017 this is important because it indicates a long term liability II Problem 3 5 a Explain each transaction i Issued stock for 45000 cash ii 1500 supplies on account iii paid 1000 cash to creditors for amounts owed iv earned 22000 in fees v paid 14000 cash for expenses vi used up 1100 worth of supplies vii earned 9000 fees for services on account accrued revenue viii paid 6000 in dividends notice this did not go under expenses b 15 900 III Problem 3 6 a Deferred revenue b Deferred expense c Deferred revenue d Accrued revenue e Accrued expense f Deferred expense g Accrued expense h Accrued expense IV Problem 3 8 a Supplies used 2250 b Beginning supplies supply purchases supplies used up ending supply 0 X 3100 1100 4200 worth of supplies purchased V VI Problem 3 9 a Insurance expense 18300 b Prepaid insurance 18300 Problem 3 10 48000 X 15600 fees earned revenue 32400 unearned fees 32400 VII Problem 3 12 this problem goes over what happens when an entry is omitted a Income statement revenue and net income are understated b Retained earnings and stockholder s equity are understated by 29500 liability is overstated by 29500 c Example shown As is Should be Revenue 100000 129500 Expense 50000 50000 Net Income 50000 79500 The as is column is the statement with the number omitted The should be column contains the correct adjustment
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