Homework Session 7 Spring 2010 - Homework Session 7 Spring...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Homework Session 7 Spring 2010 AP4–2. Req. 1 a. Prepaid expense e. Unearned revenue b. Accrued expense f. Accrued expense c. Unearned revenue g. Accrued expense d. Prepaid expense h. Accrued revenue Req. 2 a. Insurance expense (+E, - SE). ....................................... 1,600 Prepaid insurance ( - A). ...................................... 1,600 ($3,200 ÷ 6 months x 3 months of coverage) b. Wage expense (+E, - SE). ............................................. 900 Wages payable (+L). ........................................... 900 c. Unearned maintenance revenue ( - L). ........................... 225 Maintenance revenue (+R, +SE). ........................ 225 ($450 ÷ 2 months x 1 month) d. Depreciation expense (+E, - SE). ................................... 3,000 Accumulated depreciation, service truck (+XA, - A) 3,000 e. Unearned service revenue ( - L). .................................... 700 Service revenue (+R, +SE). ................................. 700 ($4,200 ÷ 12 months x 2 months) f. Interest expense (+E, - SE). ........................................... 600 Interest payable (+L). ............................................ 600 ($16,000 x 9% ÷ 12 months x 5 months = $600) g. Property tax expense (+E, - SE). ................................... 500 Property tax payable (+L). ..................................... 500 h. Accounts receivable (+A). ............................................. 2,000 Service revenue (+R, +SE). ................................ 2,000
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
AP4–6. Req. 1 December 31, 2009, Adjusting Entries (1) Accounts receivable (+A) . ........................................ 1,500 ( b ) Service revenue (+R, +SE) . ........................... 1,500 ( j ) To record service fees earned, but not collected. (2) Rent expense (+E, - SE) . .......................................... 400 ( m ) Prepaid rent ( - A). ............................................ 400 ( c ) To record rent expired as an expense. (3) Depreciation expense (+E, - SE) . ............................. 17,500 ( l ) Accumulated depreciation (+XA, - A) 17,500 ( e ) To record depreciation expense. (4) Unearned revenue ( - L) . ............................................ 8,000 ( g ) Service revenue (+R, +SE) . ........................... 8,000 ( j ) To record service fees earned. (5) Income tax expense (+E, - SE) . ................................ 6,500 ( n ) Income taxes payable (+L) . ........................... 6,500 ( f ) To record income taxes for 2009. Req. 2 Amounts before Adjusting Entries Amounts after Adjusting Entries Revenues: Service revenue $83,000 $92,500 Expenses: Salary expense 54,000 54,000 Depreciation expense 17,500 Rent expense 400 Income tax expense 6,500 Total expense 54,000 78,400 Net income $ 29,000 $ 14,100 Net income is $14,100 because this amount includes all revenues and all expenses (after the adjusting entries). This amount is correct because it incorporates the effects of the revenue and matching principles applied to all transactions whose effects extend
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/25/2010 for the course HADM 1121 taught by Professor Dittman during the Spring '07 term at Cornell University (Engineering School).

Page1 / 20

Homework Session 7 Spring 2010 - Homework Session 7 Spring...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online