S2008 ICE 3_student

S2008 ICE 3_student - has yet to accrue any interest...

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08s202 Topic 3-Adjusting Journal Entries Problem ICE 3 Adjusting entries: Make the following journal entries in good form for Long Co. as of December 31, 2007. You may omit explanatons. 1 a Long Co. received its utility bill for $400 on December 30. The bill will not be paid until January 2008. b Long Co. purchased $3,000 of supplies during 2007. $600 of the supplies are still on hand as of December 31, 2007 c Wages of $3400 are owed to employees for the hours they worked through December 31. They employees will be paid next year as part of their biweekly paychecks. d The unadjusted trial balance has a credit of $1,600 to unearned revenue. As of December 31, one-half of this amount has been earned. e Services of $1,900 were performed at the end of December but have not yet been billed. f Depreciation expense on the equipment is $280 for the year. g Long borrowed $20,000 on a 6%, six-month note on November 1 and
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Unformatted text preview: has yet to accrue any interest expense. h On July 1, 2007, Long bought a one-year liability insurance policy for $1,800. Six months' coverage has now expired. 2 Suppose a company decided not to make adjusting entries. Would net income be over- or under-stated? What about liabilities? 3 Do cash-based statements require adjusting entries? 08s202 Topic 3-Adjusting Journal Entries ICE 3 Solution a 31-Dec Accounts payable 400 Utilities expense 400 b 31 Supplies expense 2400 Supplies 2400 c 31 Salaries payable 3400 Salaries expense 3400 d 31 Unearned service revenue 800 Service revenue 800 e 31 Accounts receivable 1900 Service revenue 1900 f 31 Accumulated depreciation-equipm 280 Equipment 280 g 31 Interest expense 200 Interest payable 200 h 31 Insurance expense 900 Prepaid insurance 900 2 You can not tell wether it would be under or over-stated if you don't know the 3 No....
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This note was uploaded on 04/09/2008 for the course MGT 202 taught by Professor Normancolter during the Spring '08 term at New Mexico.

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S2008 ICE 3_student - has yet to accrue any interest...

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