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ch3 - BRIEF EXERCISE 3-1 May 1 Cash 4,000 Common Stock...

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BRIEF EXERCISE 3-1 May 1 Cash .............................................................. 4,000 Common Stock ..................................... 4,000 3 Equipment .................................................... 1,100 Accounts Payable ................................. 1,100 13 Rent Expense ............................................... 400 Cash ....................................................... 400 21 Accounts Receivable ................................... 500 Service Revenue ................................... 500 BRIEF EXERCISE 3-2 Aug. 2 Cash ............................................................... 12,000 Equipment ...................................................... 2,500 Owner’s Capital ...................................... 14,500 7 Supplies ......................................................... 500 Accounts Payable .................................. 500 12 Cash ............................................................... 1,300 Accounts Receivable .................................... 670 Service Revenue .................................... 1,970 15 Rent Expense ................................................. 600 Cash ......................................................... 600 19 Supplies Expense .......................................... 230 Supplies ($500 $270) ............................ 230 EXERCISE 3-6 1. Accounts Receivable ....................................................... 750 Service Revenue ....................................................... 750
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2. Utilities Expenses ............................................................ 520 Accounts Payable ..................................................... 520 3. Depreciation Expense ..................................................... 400 Accumulated Depreciation Equipment ................ 400 Interest Expense .............................................................. 500 Interest Payable ........................................................ 500 4. Insurance Expense ($12,000 X 1/12) ............................... 1,000 Prepaid Insurance .................................................... 1,000 5. Supplies Expense ($1,600 $500) .................................. 1,100 Supplies ..................................................................... 1,100 EXERCISE 3-7 ( (a) Ending balance of supplies $700 Add: Adjusting entry 950 Deduct: Purchases 850 Beginning balance of supplies $800 (b) Total prepaid insurance $4,800 ($400 X 12) Amount used (6 X $400) 2,400 Present balance $2,400 The policy was purchased six months ago (August 1, 2013) (c) The entry in January to record salary and wages expense was Salaries and Wages Expense ............................... 1,800 Salaries and Wages Payable ................................ 700 Cash .................................................................. 2,500
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The “T” account for salaries payable is Salaries and Wages Payable Paid 700 Beg. Bal. ? January End Bal. 800 The beginning balance is therefore Ending balance of salaries and wages payable $ 800 Plus: Reduction of salaries and wages payable 700
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