# On the balance in pinnacle exploration companys

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Chapter 9 / Exercise EX 9–17
Financial and Managerial Accounting Using Excel for Success
Reeve/Warren
Expert Verified
57) On December 31, 2014, the balance in Pinnacle Exploration Company's Unearned Revenue account was a credit of \$8,000. In January, 2015, the company received an advance payment of \$14,000 from a new customer for services to be performed. By January 31, adjustments were made to recognize \$7,000 of the revenue which had been earned during January. What was the balance in Unearned Revenue on January 31, 2015? A) \$7,000 credit B) \$ 14,000 debit C) \$8,000 credit D) \$15,000 credit Answer: Explanation: D) Beginning balance in Unearned Revenue\$ 8,000 Add advance payment received 14,000 Less Unearned Revenue recognized as Service Revenue(7,000) Ending balance in Unearned Revenue \$15,000 D
Diff: 2 LO: 3-3 AACSB: Application AICPA Functional: Measurement 58) A business purchased equipment for \$150,000 on January 1, 2015. The equipment will be depreciated over five years of its useful life using the straight-line depreciation method. The business records depreciation once a year on December 31. Which of the following is the adjusting entry required to record depreciation on equipment for the year 2015? (Assume the salvage value of the acquired equipment to be zero.) C
Diff: 2 LO: 3-3 AACSB: Application AICPA Functional: Measurement 24
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Chapter 9 / Exercise EX 9–17
Financial and Managerial Accounting Using Excel for Success
Reeve/Warren
Expert Verified
59) On September 1, 2014, Joy Inc. paid \$8,000 in advance for an 8-month rental space covering the period of September, 2014 through April, 2015. The prepaid expense was initially recorded as an asset. Joy Inc. makes adjusting entries once a year at year-end. The adjusting entry on December 31, 2014 would include a ________. C Diff: 2
LO: 3-3 AACSB: Application AICPA Functional: Measurement 60) Saturn Inc. signed a one-year \$12,000 note payable at 8% interest on May 1, 2015. How much interest expense must be accrued on May 31, 2015? C Diff: 2
LO: 3-3 AACSB: Application AICPA Functional: Measurement 61) Saturn Inc. signed a one-year \$48,000 note payable at 8% interest on May 1, 2014. If Saturn Inc. only adjusts its accounts once a year at year-end, how much interest expense was accrued on December 31, 2014? A) \$1,280 B) \$3,840 C) \$2,560 D) \$3,200 Answer: Explanation: C) Interest Expense from May to December, 2014 = (\$48,000 × 8% × 8 months) ÷ 12 months = \$2,560 C Diff: 2
LO: 3-3 AACSB: Application AICPA Functional: Measurement 25