11 - P4-2a. DEFERRED REVENUEUnearned...

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Unformatted text preview: P4-2a. DEFERRED REVENUEUnearned Revenue4,800Revenue4,800b. ACCRUED EXPENSEWages Expense14,300Wages Payable14,300c. ACCRUED REVENUEAccounts Receivable2,000Service Revenue2,000d. ACCRUED EXPENSEInterest Expense600Accrued Expense Payable600e. DEFERRED EXPENSEInsurance Expense1,000Prepaid Insurance1,000f. DEFERRED EXPENSEDepreciation Expense1,500Accumulated Depreciation1,500g. DEFERRED REVENUE Service Revenue400Unearned Service Revenue400h. ACCRUED EXPENSEIncome Tax Expense400Income Tax Payable400P4-71a. Accounts Receivable400Service Revenue400Since the company performed the service & has a note saying it will be paid, the transaction is recorded.1b. Insurance Expense200Prepaid Insurance200Since a year has gone by, the company used a portion of their insurance costing $2001c. Depreciation Expense8,500Accumulated Dep.8,500Since the depreciation accumulates at the end of each year, it gets recorded as an adjustment each December.1d. Income Tax Expense4,700Income Taxes Payable4,700Since the income tax is incurred at the end of each period, the adjustment takes place in December. 2. The amount of income before the adjusting entries is $4,300compared to ($8,700) after the adjusting entries. The correct amount of income is (8,700) because this takes into account all of the revenues and expenses that occurred in the period that were not previously recorded.3. Earnings per Share = Net Income / Outstanding SharesEPS = (8,700) / 3,000 = ($2,90)4. Net Profit Margin = Net Income / Net SalesNPM = (8.700) / 46,400 = (18.8)%5.Service Revenue (-R)46,400Retained Earnings (-SE)8,700Salary Expense (-E)41,700Depreciation Expense (-E)8,500Insurance Expense (-E)200Income Tax Expense (-E)4,7006.Wagonblatt CompanyPost-closing Trial BalanceDecember 31, 2006Cash9,000 Accounts Receivable400Prepaid Insurance400Equipment120,200Accumulated Depreciation40,000Income Taxes Payable4,700Contributed Capital80,000Retained Earnings5,300Service RevenueSalary ExpenseDepreciation ExpenseInsurance ExpenseIncome Tax ExpenseTOTAL130,000130,000P4-8...
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This note was uploaded on 05/07/2008 for the course H ADM 121 taught by Professor Ddittman during the Spring '07 term at Cornell University (Engineering School).

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11 - P4-2a. DEFERRED REVENUEUnearned...

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