Chapter 3 Fly-By-Nite Illustration

Chapter 3 Fly-By-Nite Illustration - The Fly-By-Night...

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The Fly-By-Night Accounting Service Nov. 1 Owner invests $10,000 to start company. 2 Owner buys a $3,000 computer 3 Buys a $300 calculator on Credit 4 Pays November rent of $400 5 Receives Fee Income of $700 6 Pays for Liability Insurance for next 12 months amounting to $300 7 Lost bet on Oakland Raiders. Pays Bookie $125 Dec. 8 Pays December Rent of $400 9 Receives Fee Income of $1,000 10 Pays November Phone Bill of $85 11 Withdraws $500 for Personal Uses. 12 Pays off Calculator billing On December 31 st , made some Year-End Adjustments… 13 Records Unbilled Fees totaling $900 14 Estimated December Phone Bill at $70 15 Determine and record Insurance Expense ($300/12 moths = $25 per month x 2 months = $50 ) 16 Determine and record Depreciation of Computer ($3,000/ 4yr = $750 per year/12 mo. = $62.50 per month. $62.50 per mo. x 2 months = $125 )
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Cash Accounts Payable Owner’s Equity Accounts Rec. Draw Prepaid Insurance Fee Income Equipment Phone Expense Rent Expense Accum. Deprec. Deprec. Expense Insurance Exp.
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Chapter 3 Fly-By-Nite Illustration - The Fly-By-Night...

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