Accrual example - Delilah doggies Dayspa

Accrual example - Delilah doggies Dayspa - d The note...

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Delilah's Deluxe Doggie Dayspa Unadjusted Trial Balance December 31, 2010 Debit Credit Cash $13,500 Accounts Receivable $14,000 Supplies $3,500 Prepaid Rent $24,000 Prepaid Insurance $12,000 Notes Receivable due 3/31/11 $30,000 Equipment $245,000 Accounts Payable $12,500 Unearned Service Revenue $20,000 Notes Payable due 5/1/13 $100,000 Capital Stock $50,000 Dividends $12,000 Service Revenue $367,500 Salary Expense $165,000 Rent Expense $20,000 Income Tax Expense $11,000 $550,000 $550,000 a) An inventory of supplies reveals that $1300 of supplies are on hand b) Delilah's has a 6 day work week, Monday through Saturday Employees are paid every Friday 12/31 is a Tuesday Delilah's weekly payroll is $3,600 c) The equipment was purchased 1/1//10 It has an expected life of 10 years and no salvage value
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Unformatted text preview: d) The note receivable was issued by a client on 10/31/10 (accrued revenue/asset) The annual interest rate is 7% e) The note payable was issued 4/1/10 (accrued expense/liability) The annual interest rate is 5% f) Unearned service revenue represents gift certificates purchased (unearned revenue/liability) At year end, $8,000 of the certificates have been used g) Prepaid insurance represents a payment of $12,000 for 2 years coverage (prepaid expense/asset) The payment was made on 7/1/10 h) Prepaid rent represents a payment of $24,000 for 12 months rent (prepaid expense/asset) The payment was made on 9/1/10 ( prepaid expense/asset) ( accrued expense/liability) ( prepaid expense/asset)...
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