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HW_04_Solutions

# HW_04_Solutions - Solutions to Homework 4 Raffaele B Mari...

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Solutions to Homework 4 Due October 14, 2010 Raffaele B. Mari, CPA Econ 25 Econ of Acctg. EXERCISE 4-2 (a) 8. Going concern assumption (b) 1. Economic entity assumption (c) 7. Full disclosure principle (d) 3. Monetary unit assumption (e) 6. Materiality (f) 4. Time period assumption (g) 2. Matching principle (h) 5. Cost principle EXERCISE 4-13 Answer Computation (a) Supplies balance = \$1,000 Supplies expense \$ 950 ) Add: Supplies (1/31) 700 ) Less: Supplies purchased (650) Supplies (1/1) \$1,000 ) (b) Total premium = \$6,240 Total premium = Monthly premium X 12; \$520 X 12 = \$6,240 Purchase date = May 1, 2009 Purchase date: On Jan. 31, there are 3 months coverage remaining (\$520 X 3). Thus, the purchase date was 9 months earlier on May 1, 2009. (c) Salaries payable = \$1,900 Cash paid \$2,500 Salaries payable (1/31/10) 1,200 3,700 Less: Salaries expense 1,800 Salaries payable (12/31/09) \$1,900 (d) Service revenue = \$950 Service revenue \$2,000 Unearned revenue (1/31/10) 750 2,750 Cash received in Jan. 1,800 Unearned revenue (12/31/09) \$ 950

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Solutions to Homework 4 Due October 14, 2010 Raffaele B. Mari, CPA Econ 25 Econ of Acctg.
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HW_04_Solutions - Solutions to Homework 4 Raffaele B Mari...

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