Increase Salaries and Wages Expense 650 Increase Salaries and Wages Payable 650

Increase salaries and wages expense 650 increase

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Increase Salaries and Wages Expense .........................................$650Increase Salaries and Wages Payable ..........................................650Ans: N/A, LO 2 & 3, BT: AP, Difficulty: Moderate, TOT: 10 min., AACSB: Analytic, AICPA FC: Reporting, IMA: ReportingEx. 252Prepare year-end adjustments for the following transactions. Indicate the change in each account affected (Increase or Decrease), the account title of each account affected, and the amount.1.Accrued interest on notes receivable is $30.2.$1,000 of unearned service revenue has been recognized.3.Three years’ rent, totaling $45,000, was paid in advance at the beginning of the year.4.Services totaling $2,900 had been performed but not yet billed at the end of the year.5.Depreciation on equipment totaled $6,500 for the year.6.Supplies purchased totaled $850. By year end, only $250 of supplies remained.7.Salaries owed to employees at the end of the year total $960FOR INSTRUCTOR USE ONLY4-71
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Test Bank for Survey of Accounting, First EditionSolution 252(10 min.)1.Increase Interest Receivable...........................................................$30Increase Interest Revenue..............................................................302.Decrease Unearned Service Revenue............................................$1,000Increase Service Revenue .............................................................1,0003.Increase Rent Expense ................................................................$15,000Decrease Prepaid Rent ................................................................15,000($45,000 3 = $15,000)(Rent paid 3)4.Increase Accounts Receivable.....................................................$2,900Increase Service Revenue...........................................................2,9005.Increase Depreciation Expense ..................................................$6,500Increase Accumulated Depreciation—Equipment .......................6,5006.Increase Supplies Expense .........................................................$600Decrease Supplies .......................................................................600($850 – $250)(sup. purch. – end. sup.)7.Increase Salaries and Wages Expense ......................................$960Increase Salaries and Wages Payable .......................................960Ans: N/A, LO 2 & 3, BT: AP, Difficulty: Moderate, TOT: 10 min., AACSB: Analytic, AICPA FC: Reporting, IMA: ReportingEx. 253Janus Coat Company purchased a delivery truck on June 1 for $30,000, paying $10,000 cash andsigning a 6%, 2-month note for the remaining balance. The truck is expected to depreciate $6,000each year. Janus Coat Company prepares monthly financial statements.Instructions:(a)Use the tabular summary below to record the acquisition of the delivery truck on June 1st.Assets=Liabilities+Stockholders' EquityAccum.Depr.NotesInt.Cash+EquipEquip=Payable+Pay.Expenses (b)Enter any adjustments that should be made on June 30th, using the tabular summary(c)Show how the delivery truck will be reflected on Janus Coat Company's balance sheet onJune 30th.FOR INSTRUCTOR USE ONLY4-72
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Accrual Accounting ConceptsSolution 253(10 min.)Assets=Liabilities+Stockholders' EquityAccum.Depr.NotesInt.Cash+EquipEquip=Payable+Pay.Ex-penses(a)June 110,00030,000+20,000(b)June 30500500Dept. Exp.30+100100Int. Exp.(c)AssetsEquipment$30,000Less: Accumulated Depreciation—Equipment500$29,500Ans: N/A, LO 2 & 3, BT: AP, Difficulty: Moderate, TOT: 10 min., AACSB: Analytic, AICPA FC: Reporting, IMA: ReportingEx. 254Sunkan Company prepares monthly financial statements. In the tabular summary below are se-lected accounts and their balances on September 30 before any adjustments have been made forthe month of September.
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