Intermediate Accounting Week 1 Chapter 2 Exercises

Intermediate Accounting Week 1 Chapter 2 Exercises -...

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Unformatted text preview: Chapter 2 1 2–20. 1. Adjusting Entries (a) Insurance Expense..................................................... 1,200 Prepaid Insurance.................................................. 1,200 ($4,800 ÷ 24 mo. = $200 × 6 mo. = $1,200 ) (b) Rent Revenue.............................................................. 1,150 Unearned Rent Revenue........................................ 1,150 ($5,750 ÷ 5 mo. = $1,150 × 1 mo. = $1,150) (c) Advertising Materials................................................. 475 Advertising Expense.............................................. 475 (d) Prepaid Rent................................................................ 1,800 Rent Expense......................................................... 1,800 ($3,000 ÷ 5 mo. = $600 × 3 mo. = $1,800) (e) Office Supplies............................................................ 250 Miscellaneous Office Expense.............................. 250 (f) Interest Expense......................................................... 428 Interest Payable...................................................... 428 2. Sources of Information (a) The insurance register; the insurance policy (b) The journal entry or other original data from which the posting was made to the rental revenue account; the rental contract (c) The physical count of advertising materials on hand (d) The cash disbursements journal or vouchers payable record; the rental contract (e) The physical count of supplies on hand (f) The notes payable register; the note itself 2–23. 1. Adjusting Entries Prepaid Operating Expenses......................................... 4,000 General Operating Expenses................................... 4,000 Sales Commissions........................................................ 5,900 Sales Commissions Payable................................... 5,900 Investment Revenue Receivable................................... 1,000 Investment Revenue................................................. 1,000 General Operating Expenses........................................ 4,500 Accumulated Depreciation—Buildings................... 4,500 Chapter 2 2 General Operating Expenses........................................ 5,000 Accumulated Depreciation—Machinery................. 5,000 Income Tax Expense...................................................... 18,100 Income Taxes Payable.............................................. 18,100 Closing Entries Sales................................................................................ 590,000 Investment Revenue....................................................... 6,000 Retained Earnings.................................................... 596,000 Retained Earnings.......................................................... 560,500 General Operating Expenses................................... 106,500 Sales Commissions.................................................. 205,900 Cost of Goods Sold.................................................. 230,000...
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Intermediate Accounting Week 1 Chapter 2 Exercises -...

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