03-ClassExercises - ACC211 NVCC Annandale Mitchell Chapter...

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ACC211 NVCC - Annandale Mitchell Chapter 3 - Class Exercises PROBLEM 1 of 2 Lightning McQueen Company has the following balances in selected accounts on December 31, 2010. Accounts Receivable $ -0- Accumulated Depreciation—Equipment -0- Equipment 7,000 Interest Payable -0- Notes Payable 10,000 Prepaid Insurance 2,100 Salaries Payable -0- Supplies 2,450 Unearned Consulting Revenue 40,000 All the accounts have normal balances. The information below has been gathered at December 31, 2010. 1. Lightning McQueen Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2010. 2. A count of supplies on December 31, 20010, indicates that supplies of $800 are on hand. 3. Depreciation on the equipment for 2008 is $1,000. 4. Lightning McQueen Company paid $2,100 for 12 months of insurance coverage on June 1, 2010. 5. 6. Lightning performed consulting services for a client in December 2010. The client will be billed $4,200. 7. Instructions Lightning McQueen Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the
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