ISU ACCT 284 - Chapter3 (8 pages)

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Chapter3



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Chapter3

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Pages:
8
School:
Iowa State University
Course:
Acct 284 - Financial Accountng
Financial Accountng Documents
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8 2 2017 1 Assignment Print View Award 1 out of 1 00 point Exercise 3 2 Classifying adjusting entries LO C3 In the blank space beside each adjusting entry enter the letter of the explanation A through F that most closely describes the entry A B C D E F To record this period s depreciation expense To record accrued salaries expense To record this period s use of a prepaid expense To record accrued interest revenue To record accrued interest expense To record the earning of previously unearned income E Interest Expense 2 208 Interest Payable C 2 208 Insurance Expense 3 180 Prepaid Insurance F 3 180 Unearned Professional Fees 19 250 Professional Fees Earned D Interest Receivable 19 250 3 300 Interest Revenue A 3 300 Depreciation Expense 38 217 Accumulated Depreciation B Salaries Expense Salaries Payable 38 217 13 280 13 280 References Worksheet Exercise 3 2 Classifying adjusting entries LO C3 http ezto mheducation com hm accounting tpx todo printviewSingle Learning Objective 03 C3 Identify the types of adjustments and their purpose 2 2 8 2 2017 Assignment Print View Score 2 8 13 10 Points 81 30 Award 1 out of 1 00 point Exercise 3 4 Determining cost ows through accounts LO C1 A1 P1 Determine the missing amounts in each of these four separate situations a through d a Supplies available prior year end b 400 c 1 200 Supplies purchased during the current year 2 800 6 500 Total supplies available 3 200 7 700 Supplies available current year end 650 6 500 Supplies expense for the current year 2 550 1 200 d 1 260 8 490 2 288 3 000 9 750 5 288 1 350 700 8 400 4 588 References Worksheet Learning Objective 03A1 Explain how accounting adjustments link to financial statements Exercise 3 4 Determining cost flows through accounts LO C1 A1 P1 Learning Objective 03C1 Explain the importance of periodic reporting and the time period assumption http ezto mheducation com hm accounting tpx todo printviewSingle Learning Objective 03 P1 Prepare and explain adjusting entries 1 1 8 2 2017 3 Assignment Print View Award 1 out of 1 00 point Exercise 3 5 Adjusting and paying accrued expenses LO A1 P1 a On April 1 the company retained an attorney for a flat monthly fee of 3 500 Payment for April legal services was made by the company on May 12 b A 900 000 note payable requires 12 annual interest or 9 000 to be paid at the 20th day of each month The interest was last paid on April 20 and the next payment is due on May 20 As of April 30 3 000 of interest expense has accrued c Total weekly salaries expense for all employees is 10 000 This amount is paid at the end of the day on Friday of each five day workweek April 30 falls on Tuesday of this year which means that the employees had worked two days since the last payday The next payday is May 3 The above three separate situations require adjusting journal entries to prepare financial statements as of April 30 For each situation present both the April 30 adjusting entry and the subsequent entry during May to record the payment of the accrued expenses Use 360 days a year Do not round intermediate calculations No Date 1 Apr 30 General Journal Legal fees expense Legal fees payable 2 May 12 Legal fees payable Cash 3 Apr 30 Interest expense Interest payable 4 May 20 Apr 30 May 03 3 500 3 500 3 000 6 000 3 000 Salaries expense Salaries payable Cash 4 000 3 500 3 000 9 000 4 000 10 000 6 000 4 000 Salaries expense 3 500 Interest payable Salaries payable 6 Credit Interest expense Cash 5 Debit References Worksheet Learning Objective 03 A1 Explain how accounting adjustments link to financial statements Exercise 3 5 Adjusting and paying accrued expenses LO A1 P1 Learning Objective 03 P1 Prepare and explain adjusting entries http ezto mheducation com hm accounting tpx todo printviewSingle 2 2 8 2 2017 Assignment Print View Score 4 8 13 10 Points 81 30 Award 1 out of 1 00 point Exercise 3 6 Preparing adjusting entries LO P1 a Depreciation on the company s equipment for 2015 is computed to be 18 000 b The Prepaid Insurance account had a 6 000 debit balance at December 31 2015 before adjusting for the costs of any expired coverage An analysis of the company s insurance policies showed that 1 100 of unexpired insurance coverage remains c The Office Supplies account had a 700 debit balance on December 31 2014 and 3 480 of office supplies were purchased during the year The December 31 2015 physical count showed 300 of supplies available d Two thirds of the work related to 15 000 of cash received in advance was performed this period e The Prepaid Insurance account had a 6 800 debit balance at December 31 2015 before adjusting for the costs of any expired coverage An analysis of insurance policies showed that 5 800 of coverage had expired f Wage expenses of 3 200 have been incurred but are not paid as of December 31 2015 Prepare adjusting journal entries for the year ended date of December 31 2015 for each of these separate situations Assume that prepaid expenses are initially recorded in asset accounts Also assume that fees collected in advance of work are initially recorded as liabilities No Transaction 1 a General Journal Depreciation expense Equipment Accumulated depreciation Equipment 2 3 b c Insurance expense d e Insurance expense Prepaid insurance 6 f Office supplies expense Unearned fee revenue Wages expense Wages payable 18 000 Credit Fee revenue 5 Prepaid insurance Office supplies 4 Debit 4 900 3 880 10 000 5 800 3 200 3 880 10 000 5 800 3 200 4 900 18 000 References Worksheet Exercise 3 6 Preparing adjusting entries LO P1 http ezto mheducation com hm accounting tpx todo printviewSingle Learning Objective 03 P1 Prepare and explain adjusting entries 1 2 8 2 2017 http ezto mheducation com hm accounting tpx todo printviewSingle Assignment Print View 2 2 8 2 2017 5 Assignment Print View Award 1 out of 1 00 point Exercise 3 7 Preparing adjusting entries LO P1 a b c d One third of the work related to 15 000 cash received in advance is performed this period Wages of 8 000 are earned by workers but not paid as of December 31 2015 Depreciation on the company s equipment for 2015 is 18 000 The Office Supplies account had a 240 debit balance on December 31 2014 During 2015 5 200 of office supplies are purchased A physical count of supplies at December 31 2015 shows 440 of supplies available e The Prepaid Insurance account had a 4 000 balance on December 31 2014 An analysis of insurance policies shows that 1 200 of unexpired insurance benefits remain at December 31 2015 f The company


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