Week3_ch3_solutions [Uploaded]

Week3_ch3_solutions [Uploaded] - FB2100 Accounting I...

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FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Week 3 – Chapter 3 Problem 3-1A (35 minutes) Part 1 Adjustment (a) Dec. 31 Office Supplies Expense . ............................... 14,846 Office Supplies . ........................................ 14,846 To record cost of supplies used ($4,000 + $13,400 - $2,554). Adjustment (b) 31 Insurance Expense . ......................................... 11,440 Prepaid Insurance . ................................... 11,440 To record annual insurance coverage cost. Policy Cost per Month Months Active in 2011 2011 Cost A $600 ($14,400/24 mo.) 12 $ 7,200 B 360 ($12,960/36 mo.) 9 3,240 C 200 ($ 2,400 /12 mo.) 5 1,000 Total $11,440 Adjustment (c) 31 Salaries Expense (2 days x $1,960) . .............. 3,920 Salaries Payable. ...................................... 3,920 To record accrued but unpaid wages. Adjustment (d) 31 Depreciation Expense—Building . .................. 30,500 Accumulated Depreciation—Building . .. 30,500 To record annual depreciation expense [($960,000 - $45,000) / 30 years = $30,500] Adjustment (e) 31 Rent Receivable . ........................................... 3,000 Rent Earned . .......................................... 3,000 To record earned but unpaid Dec. rent. Adjustment (f) 31 Unearned Rent . ............................................. 5,600 Rent Earned . .......................................... 5,600 To record the amount of rent earned for November and December (2 x $2,800).
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FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Week 3 – Chapter 3 Problem 3-1A (Continued) Part 2 Cash Payment for (c) Jan. 6 Salaries Payable . .......................................... 3,920 Salaries Expense* . ....................................... 5,880 Cash . ...................................................... 9,800 To record payment of accrued and current salaries. *(3 days x $1,960) Cash Payment for (e) 15 Cash . .............................................................. 6,000 Rent Receivable . ................................... 3,000 Rent Earned . .......................................... 3,000 To record past due rent for two months.
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FB2100 – Accounting I – Semester A 2010 Solutions to Assigned Questions – Week 3 – Chapter 3 Ethics Challenge — BTN 3-3 1. There are several courses of action that Tamira could have taken. Two possibilities follow: a. She could have consulted with the president and told him that finalized financial statements would not be ready by the time of the meeting. She could explain that delay in financial statement preparation is a normal event given the need to wait for final information to prepare accurate adjustments. Possibly the meeting could be rescheduled or Tamira could have asked how the president preferred her to proceed. b. The estimation decision was not a bad choice in itself.
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Week3_ch3_solutions [Uploaded] - FB2100 Accounting I...

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