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Chapter 3 Solutions(1) - PRACTICE EXERCISES PE 31B a Yes b...

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PRACTICE EXERCISES PE 3–1B a. Yes c. No e. Yes b. No d. Yes f. Yes PE 3–3A Insurance Expense .......................................................... 9,000 Prepaid Insurance ...................................................... 9,000 Insurance expired ($6,000 + $7,200 – $4,200). PE 3–3B Supplies Expense ............................................................ 3,930 Supplies ...................................................................... 3,930 Supplies used ($1,815 + $3,790 – $1,675). PE 3–4A Unearned Rent ................................................................. 3,825 Rent Revenue ............................................................. 3,825 Rent earned [($15,300/12) × 3 months]. PE 3–4B Unearned Fees ................................................................. 25,655 Fees Earned ................................................................ 25,655 Fees earned ($31,850 – $6,195). PE 3–5A Accounts Receivable ...................................................... 12,400 Fees Earned ................................................................ 12,400 Accrued fees. 1
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PE 3–6A Salaries Expense ............................................................. 19,400 Salaries Payable ......................................................... 19,400 Accrued salaries [($29,100/6 days) × 4 days]. PE 3–6B Salaries Expense ............................................................. 7,750 Salaries Payable ......................................................... 7,750 Accrued salaries [($19,375/5 days) × 2 days]. PE 3–7A Depreciation Expense ..................................................... 5,500 Accumulated Depreciation—Equipment ................. 5,500 Depreciation on equipment. PE 3–7B Depreciation Expense ..................................................... 3,200 Accumulated Depreciation—Equipment ................. 3,200 Depreciation on equipment. PE 3–8A a. Revenues were understated by $11,150. b. Expenses were understated by $7,430 ($1,430 + $6,000). c. Net income was understated by $3,720 ($11,150 – $7,430). PE 3–8B a. Revenues were understated by $15,300. b. Expenses were understated by $7,850 ($4,100 + $3,750). c. Net income was understated by $7,450 ($15,300 – $7,850).
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PE 3–9A a. The totals are equal even though the credit should have been to Wages Payable instead of Accounts Payable.
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