223_Hwk_4_Solutions

223_Hwk_4_Solutions - HA 223 Fall 2006 Homework 4 M41....

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HA 223 – Fall 2006 – Homework 4 M4–1. Puglisi Company Adjusted Trial Balance At June 30, 2007 Debit Credit Cash $ 120 Accounts receivable 350 Inventories 610 Prepaid expenses 40 Buildings and equipment 1,400 Accumulated depreciation $ 250 Land 200 Accounts payable 200 Accrued expenses payable 150 Income taxes payable 30 Unearned fees 100 Long-term debt 1,300 Contributed capital 300 Retained earnings 120 Sales revenue 2,400 Interest income 50 Cost of sales 820 Salaries expense 660 Rent expense 400 Depreciation expense 110 Interest expense 80 Income taxes expense 110 Totals $ 4,900 $ 4,900 M4–2. (1) D; (2) B; (3) D; (4) C; (5) A; (6) C; (7) B; (8) A. M4–3. (1) A; (2) B; (3) C; (4) D.
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(a ) 1. Deferred revenue 2. Unearned rent revenue ( - L). .......................... 200 Rent revenue (+R, +SE). ........................ 200 To record one month of rent revenue earned ($800 ÷ 4 months). (b ) 1. Deferred expense 2. Insurance expense (+E, - SE). ....................... 900 Prepaid insurance ( - A). .......................... 900 To record six months of insurance expense ($3,600 x 6/24). (c ) 1. Deferred expense 2. Depreciation expense (+E, - SE). ................... 3,000 Accumulated depreciation (+XA, - A). ..... 3,000 To record annual depreciation expense. E4–3. Req. 1 The annual reporting period for this company is January 1 through December 31, 2008. Req. 2 (Adjusting entries) Both transactions are accruals because revenue has been earned and expenses incurred but no cash has yet been received or paid. ( a ) December 31, 2008: Wage expense (+E, - SE). ............................................ 6,000 Wages payable (+L). ......................................... 6,000 To record wages earned by employees during 2008, but not yet paid by the company. This entry records the (a) 2008 expense, and (b) 2008 liability, which is necessary to conform to accrual accounting and the matching principle. ( b
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This homework help was uploaded on 02/19/2009 for the course HA 230 taught by Professor Davidlee during the Fall '06 term at Cornell.

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223_Hwk_4_Solutions - HA 223 Fall 2006 Homework 4 M41....

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