This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
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....
View Full Document
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.
- Spring '08