Chapter 3 Homework Solutions

Chapter 3 Homework Solutions - Chapter 3 Homework Solutions...

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Chapter 3 Homework Solutions M3–8. Balance Sheet Income Statement Assets Liabilities Stockholders’ Equity Revenues Expenses Net Income e. –2,000 NE –2,000 NE +2,000 –2,000 f. –2,000 –2,000 NE NE NE NE g. –4,000 NE –4,000 NE +4,000 –4,000 h. –1,200/+800 NE –400 NE +400 –400 i. –1,000 NE –1,000 NE +1,000 –1,000 j. NE +2,200 –2,200 NE +2,200 –2,200 Transaction (h) results in an increase in an asset (prepaid expenses) and a decrease in an asset (cash). Therefore, the net effect on assets is - 400.
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E3–3. Activity Revenue Account Affected Amount of Revenue Earned in September a. Sales revenue $25,000 b. Sales revenue $21,000 c. None No transaction has occurred; exchange of promises only. d. Sales revenue $18,000 (= 1,000 shirts x $18 per shirt); revenue earned when goods are delivered. e. None Payment related to revenue recorded previously in (d) above. f. None No revenue earned in September; earnings process is not yet complete. g. None No revenue is earned; the issuance of stock is a financing activity. h. None No revenue earned in September; earnings process is not yet complete. i. Ticket sales revenue $4,000,000 (= $20,000,000 ÷ 5 games) j. None No revenue earned in September; earnings process is not yet complete. k. Interest revenue $1,000 (= $100,000 x 12% ÷ 12 months) l. None No revenue earned in September; earnings process is not yet complete. m. Sales revenue $100
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E3–4. Activity Expense Account Affected Amount of Expense Incurred in January a. Salary expense $45,000 incurred in January. The remaining half was incurred in December. b. Insurance expense $1,500 incurred in January. The remainder is not incurred until February and March. c. Utilities expense $6,000 d. Cost of goods sold $4,500 (= 500 shirts x $9 per shirt) e. None Expense will be recorded in the future when the related revenue has been earned. f. Cost of goods sold $45,000 (= 450 books x $100 per book) g. None December expense paid in January. h. Commission expense $14,200 i. None Expense will be recorded as depreciation over the equipment’s useful life. j. None Expense will be recorded when the related revenue has been earned. k. Supplies expense $4,800 (= $4,000 + $2,600 - $1,800) l. Wages expense $120 (= 8 hours x $15 per hour) m. Insurance expense $300 (= $3,600 ÷ 12 months) n. Repairs expense $280 o. Utilities Expense $230 p. Consulting Expense $11,500 q. None December expense paid in January.
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E3–9. 2/1 Rent expense (+E, - SE) . ...................................................... 200
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This note was uploaded on 04/09/2008 for the course BUSACC 0030 taught by Professor Stevenonaitis during the Spring '08 term at Pittsburgh.

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Chapter 3 Homework Solutions - Chapter 3 Homework Solutions...

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