Chapter 4 hw - M4-1Puglisi CompanyTrial BalanceAt June 30,

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Unformatted text preview: M4-1Puglisi CompanyTrial BalanceAt June 30, 2010DollarsUnadjusted Trial BalanceDebitCreditCash$150Accounts receivable370Inventories660Prepaid expenses30Buildings and Equipment1400Land300Accumulated Depreciation250Accounts Payable200Accrued Expenses Payable160Income Taxes Payable50Unearned Fees90Long-Term Debt1360Contributed Capital400Retained Earning150Sales Revenue2,500Interest Income60Cost of Sales880Salaries Expenses640Rent Expenses460Depreciation expenses150Interest Expenses70Income Taxes Expenses110Total$5,220$5,220M4-21.A2.B3.A4.C5.D6.B7.B8.CM4-31.D2.C3.B4.AM4-4a.Step 1: Unearned Revenue Unearned Rent RevenueStep 2: Amount: Amount given at $1,000. Liability overstated by $250, and Rent Fee Revenue understated $250Step 3: AJEUnearned Rent Fee (-L)$250Rent Fee Revenue (+R, +SE)$250Debit equals CreditAssets =Liabilities +Stockholders EquityUnearned Rent Fee -250Rent Fee Revenue +250b.Step 1: Prepaid Expenses Prepaid InsuranceStep 2: Amount: Amount 6 months has expired for two year insurance paymentInsurance - $3,800 x 6/24 = $950 for six months. Prepaid Insurance overstated by $950 but will remain overstated, and Insurance Expenses understated but will remain understated. Step 3: AJEInsurance Expenses (+E, -SE)$950Prepaid Insurance (-A)$950Debit equals CreditAssets =Liabilities +Stockholders EquityPrepaid Insurance -950Insurance Expenses +950c.Step 1: Prepaid Expenses Property and EquipmentStep 2: Amount: Annual depreciation at $3,000 for a $32,000 machineStep 3: AJEDepreciation Expense (+E, -SE)$3,000Accumulated Depreciation (+XA, - A)$3,000Debit equals Credit. Assets =Liabilities +Stockholders EquityAccumulated Depreciation -3,000 Depreciation Expense -3,000E4-31.Annual reporting period ends at December 31.2.(a) Step 1: Accrued account at December 31, 2010: Accrued Expenses- Wage payable for January 6, 2011.Step 2: Amount: $6,000 Wages entry has not been included in the books.Step 3: AJESalaries Expenses (+E, -SE)$6,000Accrued Expenses Payable (+L)$6,000Debit equals Credit. Liabilities and income statement understated. Through labor, revenue may have been generated so expenses for salaries have been generated. Since this salary has not been paid for yet, it goes under Accrued Expenses Payable....
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This note was uploaded on 10/21/2009 for the course H ADM 223 taught by Professor Pstrebel during the Spring '07 term at Cornell University (Engineering School).

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Chapter 4 hw - M4-1Puglisi CompanyTrial BalanceAt June 30,

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