Solutions to Chapter 3 (Review) practice problems

Solutions to Chapter 3 (Review) practice problems -...

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1 Solutions to Chapter 3 practice problems EXERCISE 3-1 (15–20 minutes) Apr. 2 Cash 30,000 Equipment 14,000 Christine Ewing, Capital 44,000 2 No entry—not a transaction. 3 Supplies 700 Accounts Payable 700 7 Rent Expense 600 Cash 600 11 Accounts Receivable 1,100 Service Revenue 1,100 12 Cash 3,200 Unearned Service Revenue 3,200 17 Cash 2,300 Service Revenue 2,300 21 Insurance Expense 110 Cash 110 30 Salaries Expense 1,160 Cash 1,160 30 Supplies Expense 120 Supplies 120 30 Equipment 5,100 Christine Ewing, Capital 5,100
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2 EXERCISE 3-8 (10–15 minutes) (a) Wages Expense . .................................................................. 2,900 Wages Payable . ............................................................ 2,900 (b) Utilities Expense . ................................................................. 600 Accounts Payable . ........................................................ 600 (c) Interest Expense ($60,000 X 8% X 1/12) . ............................ 400 Interest Payable . ........................................................... 400 (d) Telephone Expense . ............................................................ 117 Accounts Payable . ........................................................ 117
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3 EXERCISE 3-11 (20–25 Minutes) (a) CAVAMANLIS CO. Income Statement For the Year Ended December 31, 2010 Revenues Service revenue . ........................................ $12,590 Expenses Salaries expense . ...................................... $6,840 Rent expense . ............................................ 2,760 Depreciation expense . .............................. 145 Interest expense . ....................................... 83 Net Income . .......................................................... 9,828 $ 2,762 (b) CAVAMANLIS CO. Statement of Retained Earnings For the Year Ended December 31, 2010 Retained earnings, January 1 . ................................................. $11,310 Add: Net income . .................................................................... 2,762 Less: Dividends . ...................................................................... Retained earnings, December 31 . ............................................ 3,000 $11,072
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4 EXERCISE 3-11 (Continued) (c) CAVAMANLIS CO. Balance Sheet December 31, 2010 Assets Current Assets Cash . ............................................................. $18,972 Accounts receivable . ................................... 6,920 Prepaid rent . ................................................. 2,280 Total current assets . .............................. $28,172 Property, plant, and equipment Equipment . ................................................... 18,050 Less: Accumulated depreciation . .............. (4,895 ) Total assets . .............................................................. 13,155
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This note was uploaded on 11/05/2011 for the course ACCT 401 taught by Professor Winchel during the Spring '10 term at South Carolina.

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Solutions to Chapter 3 (Review) practice problems -...

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