Chapter 4 Homework Solutions

Chapter 4 Homework Solutions - Chapter 4 Homework Solutions...

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Chapter 4 Homework Solutions M4–4. (a ) 1. Deferred revenue 2. Unearned rent revenue ( - L). .......................... 200 Rent revenue (+R, +SE). ........................ 200 To record one month of rent revenue earned ($800 ÷ 4 months). (b ) 1. Deferred expense 2. Insurance expense (+E, - SE). ....................... 900 Prepaid insurance ( - A). .......................... 900 To record six months of insurance expense ($3,600 x 6/24). (c ) 1. Deferred expense 2. Depreciation expense (+E, - SE). ................... 3,000 Accumulated depreciation (+XA, - A). ..... 3,000 To record annual depreciation expense. M4–6. (a ) 1. Accrued expense 2. Utilities expense (+E, - SE). ........................... 320 Accrued utilities payable (+L). ................ 320 To record utilities expense incurred but not yet paid. (b ) 1. Accrued expense 2. Wages expense (+E, - SE). ............................ 4,500 Accrued wages payable (+L). ................. 4,500 To record wages expense incurred but not yet paid, calculated as 10 employees x 3 days x $150 each per day. (c ) 1. Accrued revenue
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2. Interest receivable (+A). ................................ 200 Interest revenue (+R, +SE). ................... 200 To record interest earned but not yet collected, calculated as $5,000 x 12% x 4/12.
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E4–6. Req. 1 and 2 a. Deferred expense -- cash paid before expense is incurred. Office supplies expense (+E, - SE). ............................... 850 Office supplies ( - A). ............................................. 850 Supplies used in 2007 ($350 + 800 - 300 = $850). b. Accrued expense -- expense incurred before cash is paid. Wages expense (+E, - SE). ............................................ 3,700 Wages payable (+L). ........................................... 3,700 Amount is given. c. Deferred revenue -- cash received before revenue is earned. Unearned rent revenue ( - L). .......................................... 3,000 Rent revenue (+R, +SE). ..................................... 3,000 Rent earned in 2007 ($9,000 x 2/6). d. Accrued revenue -- revenue earned before cash is collected. Rent receivable (+A).
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Chapter 4 Homework Solutions - Chapter 4 Homework Solutions...

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