Textbook Notes (363,420)
Chapter 3

12 Pages
169 Views

School
Seneca College
Department
Course
Professor
Lorna Martin- Scriver
Semester
Winter

Description
BRIEF EXERCISES BRIEF EXERCISE 3-3 (a), (b) and (e) Supplies Supplies Expense Jan. 1 825 Jan. 1 0 May 31 3,165 Dec. 31 2,975 Dec. 31 2,975 Dec. 31 Dec. 31 Bal. 1,015 Bal. 2,975 (b) May 31 Supplies...................................3,165.......... Cash...............................................3,165 (c) Cleaning Supplies used = \$825 + \$3,165 − \$1,015 = \$2,975 (d) The balance sheet will report \$1,015 as Supplies as a current asset. The income statement will report \$2,975 as Supplies Expense. (e) Dec. 31 Supplies Expense...........................2,975.... Supplies...........................................2,975 BRIEF EXERCISE 3-4 (a) March 1 Prepaid Insurance..............................4,800.. Cash ...............................................4,800. (b) Monthly cost: \$4,800 ÷ 12 = \$400/month; Number of months expired: March to December—10 months Amount expired in 2014: 10 months × \$400 = \$4,000 Number of months remaining: January to February—2 months Amount unexpired at December 31: 2 months × \$400 = \$800 Total \$4,800 = \$4,000 + \$800 (c) Dec. 31 Insurance Expense............................4,000... Prepaid Insurance................................ 4,000 (d) Prepaid Insurance Insurance Expense Mar. 1 4,800 Dec. 31 4,000 Dec. 31 4,000 Dec. 31 Bal. 800 BRIEF EXERCISE 3-5 (a) Jan. 1/13 Equipment ........................................... 18,000 Cash..........................................18,000 (b) Dec. 31/13 Depreciation Expense....................3,000. Accumulated Depreciation —Equipment................................. 3,000 (\$18,000 ÷ 6 = \$3,000 per year) Dec. 31/14 Depreciation Expense....................3,000. Accumulated Depreciation —Equipment................................. 3,000 (c) REED COMPANY Balance Sheet (partial) December 31 2014 2013 Property, plant, and equipment Equipment.....................................\$18,000.....\$18,000 Less: Accumulated depreciation..................6,000 3,000 Carrying amount...............................\$12,000.....\$15,000 REED COMPANY Income Statement (partial) Year Ended December 31 2014 2013 Depreciation Expense..............................\$3,000.... \$3,000 BRIEF EXERCISE 3-6 (a) Mar. 1 Cash..........................................4,800.......... Unearned Revenue.............................. 4,800 (b) \$4,800 ÷ 12 = \$400 per month Number of months earned March to October—8 months Amount earned to October 31: 8 × \$400 = \$3,200 Number of months remaining November to February—4 months Amount unearned at October 31: 4 × \$400 = \$1,600 Total \$4,800 = \$3,200 + \$1,600 (c) Oct. 31 Unearned Revenue..............................3,200 Service Revenue................................... 3,200 (d) Unearned Revenue Service Revenue Mar. 1 4,800 Oct. 31 3,200 Oct. 31 3,200 Oct. 31 Bal. 1,600 BRIEF EXERCISE 3-7 (a) An adjusting entry will be needed because services have been provided in November but will not be invoiced until the first of December. (b) Nov. 30 Accounts Receivable.............................455. Service Revenue................................... 455 (c) No,UllmannwillnothavetomakeajournalentryonDecember1whentheyinvoiceRackets Plus because the November 30 adjusting entry already recorded the amount. (d) Dec. 9 Cash...........................................455............. Accounts Receivable............................ 455 BRIEF EXERCISE 3-8 (a) An adjusting entry will be needed because services have been obtained in November but have not been invoiced until the first of December. Nov. 30 Maintenance Expense.............................455 Accounts Payable................................. 455 (b) No, Rackets Plus will not have to make a journal entry on December 1 when the invoice from Ullmann Maintenance is received because the November 30 adjusting entry already recorded the amount. (c) Dec. 9 Accounts Payable................................455... Cash ...................................................455 BRIEF EXERCISE 3-9 (a) July 28 Salaries Expense...............................6,000.... Cash .................................................6,000 (b) July 31 Salaries Expense...............................4,000.... Salaries Payable ................................... 4,000 (Monday to Thursday at \$1,000 each) (c) Aug. 4 Salaries Expense..............................2,000..... Salaries Payable..............................4,000...... Cash .................................................6,000 BRIEF EXERCISE 3-10 (a) Note 1: \$40,000 × 5% × 5/12 = \$833 Note 2: \$10,000 × 6% × 1/12 = 50 Total accrued interest \$883 (b) May 31/14 Interest Receivable...........................883.. Interest Revenue ............................ 883 BRIEF EXERCISE 3-11 (a) July 31/13 Equipment.............................................. 50,000 Cash.............................................14,000 Note Payable................................... 36,000 (b) Nov. 30/13 Interest Expense..............................540... Interest Payable.............................. 540 (\$36,000 × 4.5% × 4/12) (c) Jan. 31/14 Interest Expense*.............................270.. Interest Payable..............................540... Note Payable......................................... 36,000 Cash ............................................36,810 *(\$36,000 × 4.5% × 6/12) – \$540 PROBLEMS PROBLEM 3-4A 1. (a) Feb. 10 Supplies......................................1,085......... Cash................................................1,085 (b) Dec. 31 Supplies Expense (\$535 + \$1,085 – \$370) ......................1,250 Supplies ...........................................1,250 2. (a) Sept. 2 Equipment............................................... 23,500 Cash...............................................23,500 (b) Dec. 31 Depreciation Expense............................783 Accumulated Depreciation— Equipment (\$23,500 ÷ 10 × 4/12)...... 783 3. (a) Oct. Cash (\$200 × 250).................................... 50,000 Unearned Revenue............................. 50,000 (b) Dec. 31 Unearned Revenue.................................. 14,286 Admission Revenue (\$50,000 ÷ 7 × 2) ................................ 14,286 4. (a) Dec. 30 Wages Expense................................4,200... Cash................................................4,200 (b) Dec. 31 Wages Expense..................................700... Wages Payable (\$4,200 ÷ 6)............... 700 (c) Jan. 6 Wages Payable..................................700.... Wages Expense (\$4,200 ÷ 6 × 5).......
More Less

Related notes for Business - Marketing ACC120

OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Join to view

OR

By registering, I agree to the Terms and Privacy Policies
Just a few more details

So we can recommend you notes for your school.