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ACCT251E3-7Sol - 2,700 The “T” account for salaries...

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EXERCISE 3-7 (15–20 minutes) (a) Ending balance of supplies ................................. $ 900 Add: Adjusting entry ........................................... 950 Deduct: Purchases .............................................. 850 Beginning balance of supplies ........................... 1,000 (b) Total prepaid insurance ....................................... $4,800 ($400 X 12) Amount used (6 X $400) ...................................... 2,400 Present balance .................................................... 2,400 The policy was purchased six months ago (August 1, 2009) (c) The entry in January to record salary expense was Salaries Expense .................................................. 1,800 Salaries Payable ................................................... 900 Cash .................................................................
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Unformatted text preview: 2,700 The “T” account for salaries payable is Salaries Payable Paid 900 Beg. Bal. ? January End Bal. 800 The beginning balance is therefore Ending balance of salaries payable. .............. $ 800 Plus: Reduction of salaries payable. ............. 900 Beginning balance of salaries payable. ......... $1,700 (d) Service revenue. ........................................... $2,000 Cash received. ............................................... 1,600 Unearned revenue reduced. ........................ $ 400 Ending unearned revenue January 31, 2010. ................ $ 750 Plus: Unearned revenue reduced. .................................. 400 Beginning unearned revenue December 31, 2009. ....... $1,150...
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