CH%204%20in%20class%20solutions

CH%204%20in%20class%20solutions - Chapter4solutions...

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Chapter 4 solutions In class discussion:  P4-3, 6 Additional practice:  E4-5, 9, 18; P4-1, 13 PROBLEM 4-3 ADJUSTING ENTRIES—ANNUAL ADJUSTMENTS LO 3 1. Adjusting entries: a. Depreciation Expense 2,900 Accumulated Depreciation 2,900 To record annual depreciation expense: ($15,000 – $500)/5 years. Assets = Liabilities + Shareholders' Equity –2,900 –2,900 b. Supplies Expense 18,350 Supplies on Hand 18,350 To record supplies used during year: $3,600 + $17,600 – $2,850. Assets = Liabilities + Shareholders' Equity –18,350 –18,350 c. Customer Deposits 20,000 Fees Earned 20,000 To record customer deposits earned between August and December: ($24,000/6 months) X 5 months. Assets = Liabilities + Shareholders' Equity –20,000 +20,000 d. Rent Expense 5,000 Prepaid Rent 5,000 To record rent expense for November through December: $2,500 X 2. Assets = Liabilities + Shareholders' Equity –5,000 –5,000 e. Interest Expense 3,000 Interest Payable 3,000 To accrue interest payable on note $200,000 X 9% X 2/12. Assets = Liabilities + Shareholders' Equity +3,000 –3,000 f. Wage Expense 500 Wages Payable 500 To accrue wages payable at year-end.
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Assets = Liabilities + Shareholders' Equity +500 –500 PROBLEM 4-3 (continued) 2. Net increase (decrease) in net income from adjustments: a. Depreciation expense $ (2,900) b. Supplies expense (18,350) c. Fees earned 20,000 d. Rent expense (5,000) e. Interest expense (3,000) f. Wage expense (500 ) Overstatement of 2008 net income $ (9,750 ) PROBLEM 4-6 USE OF A TRIAL BALANCE AS A BASIS FOR ADJUSTING ENTRIES LO 3 1. Adjusting entries on April 30, 2008: a. Insurance Expense 100 Prepaid Insurance 100 To recognize one month's insurance expense. Assets = Liabilities + Shareholders' Equity –100 –100 b. Office Supplies Expense 300 Office Supplies 300 To record supplies used: $500 – $200. Assets = Liabilities + Shareholders' Equity –300 –300
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PROBLEM 4-6 (continued) c. Depreciation Expense 375 Accumulated Depreciation—Office Equipment. 375 To record depreciation: ($50,000 – $5,000) X 1/120. Assets = Liabilities + Shareholders’ Equity –375 –375 d. Depreciation Expense 200 Accumulated Depreciation—Automobile 200 To record depreciation: $12,000 X 1/60. Assets = Liabilities + Shareholders’ Equity –200 –200 e. Unearned Commissions 5,000 Commissions Earned 5,000 To record commissions earned: $9,500 – $4,500. Assets = Liabilities + Shareholders’ Equity –5,000 +5,000 f. Accounts Receivable 1,500 Commissions Earned 1,500 To record revenue earned, not yet collected. Assets = Liabilities + Shareholders’ Equity +1,500 +1,500 g. Interest Expense 50 Interest Payable 50 To record interest on note payable.
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This note was uploaded on 10/09/2010 for the course ACCT act 2241 taught by Professor Richardf during the Spring '10 term at Dalhousie.

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CH%204%20in%20class%20solutions - Chapter4solutions...

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