chapter3_classDE0

chapter3_classDE0 - Chapter3 Quick Study 3-10 (15 minutes)...

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Quick Study 3-10 (15 minutes) The answer is 2. Explanation Insurance premium error Understates expenses (and overstates assets) by. .......... $1,600 Accrued salaries error Understates expenses (and understates liabilities) by. ... 1,000 The collective effects from this company’s errors follow: Understates expenses by. .................................................. $2,600 Overstates assets by. ......................................................... $1,600 Understates liabilities by. ................................................... $1,000 Exercise 3-2 (25 minutes) b. Insurance Expense. ....................................................... 5,360 Prepaid Insurance*. .................................................... 5,360 To record insurance coverage that expired ($6,000 - $640). c. Office Supplies Expense. .............................................. 3,422 Office Supplies ** ......................................................... 3,422 To record office supplies used ($325 + $3,480 - $383) . d. Unearned Fee Revenue. ................................................. 3,000 Fee Revenue. .............................................................. 3,000 To record earned portion of fee received in advance ($15,000 x 1/5). e. Insurance Expense. ....................................................... 6,160 Prepaid Insurance. ..................................................... 6,160 To record insurance coverage that expired. f. Wages Expense. ............................................................. 2,700 Wages Payable. .......................................................... 2,700 To record wages accrued but not yet paid. Notes:
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This note was uploaded on 06/09/2011 for the course ECON econ 1001 taught by Professor Wong during the Fall '09 term at HKU.

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chapter3_classDE0 - Chapter3 Quick Study 3-10 (15 minutes)...

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