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chapter 3 key - Exercise 3-2(25 minutes a Depreciation...

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Exercise 3-2 (25 minutes) a. Depreciation Expense—Equipment .............................. 18,000 Accumulated Depreciation—Equipment .................. 18,000 To record depreciation expense for the year. b. Insurance Expense ........................................................ 4,900 Prepaid Insurance* ..................................................... 4,900 To record insurance coverage that expired ($6,000 - $1,100). c. Office Supplies Expense ............................................... 3,882 Office Supplies ** ......................................................... 3,882 To record office supplies used ($700 + $3,480 - $298) . d. Unearned Fee Revenue .................................................. 10,000 Fee Revenue ............................................................... 10,000 To record earned portion of fee received in advance ($15,000 x 2/3) . e. Insurance Expense ........................................................ 5,800 Prepaid Insurance ...................................................... 5,800 To record insurance coverage that expired. f. Wages Expense .............................................................. 3,200 Wages Payable ........................................................... 3,200 To record wages accrued but not yet paid. Notes: Prepaid Insurance * Office Supplies ** Bal. Bal. 6,000 Beg. Bal. 700 Purch. 3,480 ? Used ? Used End. Bal. 1,100 End. Bal. 298
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Exercise 3-3 (30 minutes) a. Unearned Fee Revenue .................................................. 5,000 Fee Revenue ............................................................... 5,000 To record earned portion of fee received in advance ($15,000 x 1/3). b. Wages Expense .............................................................. 8,000 Wages Payable ........................................................... 8,000 To record wages accrued but not yet paid. c. Depreciation Expense—Equipment .............................. 18,531 Accumulated Depreciation—Equipment .................. 18,531 To record depreciation expense for the year. d. Office Supplies Expense ............................................... 4,992 Office Supplies * .......................................................... 4,992 To record office supplies used ($240 + $5,239 - $487). e. Insurance Expense ........................................................ 2,800 Prepaid Insurance ..................................................... 2,800 To record insurance coverage expired ($4,000 - $1,200). f. Interest Receivable ....................................................... 1,000 Interest Revenue ....................................................... 1,000 To record interest earned but not yet received. g. Interest Expense ........................................................... 2,500 Interest Payable ........................................................ 2,500 To record interest incurred but not yet paid. Notes: Prepaid Insurance Office Supplies * Beg. Bal. 4,000 Beg. Bal. 240 Purch. 5,239 ? Used ? Used End. Bal. 1,200 End. Bal. 487
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Exercise 3-4 (15 minutes) a. Adjusting entry 2008 Dec. 31 Wages Expense ................................................ 1,250 Wages Payable .............................................. 1,250 To record accrued wages for one day. (5 workers x $250) b. Payday entry 2009 Jan. 4 Wages Expense ................................................ 3,750 Wages Payable .................................................. 1,250 Cash ............................................................... 5,000 To record accrued and current wages. Wages expense = 5 workers x 3 days x $250 Cash = 5 workers x 4 days x $250 Exercise 3-5 (15 minutes) a. $2,550 b. $6,500 c. $8,490 d. $2,288 Proof: (a) (b) (c) (d) Supplies available – prior year-end ....... $ 400 $1,200 $ 1,260 $2,288 Supplies purchased in current year ....... 2,800 6,500 8,490 3,000 Total supplies available ........................... 3,200 7,700 9,750 5,288 Supplies available – current year-end... (650 ) (6,500 ) (1,350 ) (700 ) Supplies expense for current year ......... $2,550 $1,200 $ 8,400 $4,588 Exercise 3-7 (20 minutes) Balance Sheet Insurance Asset using Insurance Expense using
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