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Mgmt_200_Spring_2008_solutions_2-1-08(2,1)

Mgmt_200_Spring_2008_solutions_2-1-08(2,1) - Rent...

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Management 200 – Introductory Financial Accounting– Spring 2008 Krannert School of Management - Purdue University Solutions to class assignment for February 1, 2008 E4-6. Req. 1 and 2 a. Deferred expense -- cash paid before expense is incurred. Office supplies expense (+E, - SE) ................................................. 850 Office supplies ( - A) .............................................................. 850 Supplies used in 2007 ($350 + 800 - 300 = $850). b. Accrued expense -- expense incurred before cash is paid. Wages expense (+E, - SE) ............................................................. 3,700 Wages payable (+L) ............................................................ 3,700 Amount is given. c. Deferred revenue -- cash received before revenue is earned. Unearned rent revenue ( - L) ........................................................... 3,000 Rent revenue (+R, +SE) ...................................................... 3,000 Rent earned in 2007 ($9,000 x 2/6). d. Accrued revenue -- revenue earned before cash is collected.
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Unformatted text preview: Rent receivable (+A). ..................................................................... 1,640 Rent revenue (+R, +SE). ..................................................... 1,640 ($820 x 2 months) e. Deferred expense -- cash paid for equipment before being used. Depreciation expense (+E, -SE). ................................................... 5,000 Accumulated depreciation, delivery equipment (+XA, -A) 5,000 Amount is given. f. Deferred expense -- cash paid before expense is incurred. Insurance expense (+E, -SE). ....................................................... 1,050 Prepaid insurance (-A). ........................................................ 1,050 ($4,200 x 6/24 months) g. Accrued revenue -- revenue earned before cash is received. Repair accounts receivable (+A). .................................................. 750 Repair shop revenue (+R, +SE). ......................................... 750 Amount is given....
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