NP+10e+Ch03+Solutions

NP+10e+Ch03+Solutions - P3-2 Caruso Corporation1. Adjusting...

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Unformatted text preview: P3-2 Caruso Corporation1. Adjusting Entriesa.30-Nov Supplies Expense$5,171 Supplies$5,171 Adjust for supplies used[$2,350 + $4,218 - $1,397 = $5,171]b.30-Nov Insurance Expense$6,874 Prepaid Insurance$6,874 Adjust for expired insurance[$4,720 fully expired][July 1 $4,200 x 5/12 = $1,750][Oct 1 $7,272 x 2/36 = $404]c.30-Nov Depreciation Expense-Buildings$16,000 Depreciation Expense-Equipment$40,000 Acc. Depreciation-Buildings$16,000 Acc. Depreciation-Equipment$40,000 Adjust for depreciation of building & equipmentd.30-Nov Unearned Service Revenue$4,650 Service Revenue$4,650 Adjust for service revenue earned & collected in advance[$18,600 x 3/12 = $4,650]e.30-Nov Accounts Receivable$7,000 Service Revenue$7,000 Adjust for service revenue earned & not yet billedf.30-Nov Interest Expense$18,000 Interest Payable$18,000 Adjust for interest expense incurred but not yet paidg.30-Nov Salaries Expense$10,000 Salaries Payable$10,000 Adjust for salaries incurred but not yet paid[$15,000 x 4/6 = $10,000]h.30-Nov No entryUnexecuted contractI.30-Nov Income Tax Expense$23,000 Income Tax Payable$23,000 Adjust for estimated income tax2. Commentse.Revenue is recognized because services have been performedand are due and payable....
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NP+10e+Ch03+Solutions - P3-2 Caruso Corporation1. Adjusting...

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