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Copy of Chap004 1.doc
Copy_of_Chap004_1.doc
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Copy of Chap004 1.doc-Chapter 04 - Adjustments, Fi...
Copy_of_Chap004_1.doc-Chapter 04 - Adjustments, Financial Statements,
Copy of Chap004 1.doc-Chapter 04 - ...
Copy_of_Chap004_1.doc-Chapter 04 - Adjustments, Financial Statements,
Page 17
Chapter 04 - Adjustments, Financial Statements, and the Quality of Earnings
E4–5.
Balance Sheet
Income Statement
Transaction
Assets
Liabilities
Stockholders’
Equity
Revenues
Expenses
Net
Income
E4–3 (a)
NE
+7,000
–7,000
NE
+7,000
–7,000
E4–3 (b)
+2,000
NE
+2,000
+2,000
NE
+2,000
E4–4 (a)
–450
NE
–450
NE
+450
–450
E4–4 (b)
–51,000
NE
–51,000
NE
+51,000
–51,000
E4–6.
Req. 1
a.
Accrued expense
b.
Deferred expense
c.
Accrued revenue
d.
Deferred expense
e.
Deferred expense
f.
Deferred revenue
g.
Accrued revenue
Req. 2
Computations
a.
Wages expense (+E,
SE)
.............................................
2,700
Given
Wages payable (+L)
............................................
2,700
b.
Office supplies expense (+E,
SE)
................................
675
$450 + $500
Office supplies (
A)
..............................................
675
- $275 = $675 used
c.
Rent receivable (+A)
.....................................................
1,120
$560 x 2 months
Rent revenue (+R, +SE)
.....................................
1,120
= $1,120 earned
d.
Depreciation expense (+E,
SE)
...................................
12,100
Given
Accumulated depreciation (+XA,
A)
12,100
e.
Insurance expense (+E,
SE)
........................................
600
$2,400 x 6/24 =
Prepaid insurance (
A)
........................................
600
$600 used
f.
Unearned rent revenue (
L)
..........................................
3,200
$9,600 x 2/6 =
Rent revenue (+R, +SE)
.....................................
3,200
$3,200 earned
g.
Repair accounts receivable (+A)
...................................
800
Given
Repair shop revenue (+R, +SE)
.........................
800
4-17
Page 18
Chapter 04 - Adjustments, Financial Statements, and the Quality of Earnings
E4–7.
Req. 1
a.
Accrued revenue
b.
Deferred expense
c.
Accrued expense
d.
Deferred revenue
e.
Deferred expense
f.
Deferred expense
g.
Accrued expense
Req. 2
Computations
a.
Accounts receivable (+A)
..............................................
2,700
Given
Service revenue (+R, +SE)
.................................
2,700
b.
Advertising expense (+E,
SE)
......................................
900
$1,200 x 9/12 =
Prepaid advertising (
A)
......................................
900
$900 used
c.
Interest expense (+E,
SE)
............................................
5,000
$250,000 x .12
Interest payable (+L)
...........................................
5,000
x 2/12 (since last
payment) = $5,000
incurred
d.
Unearned storage revenue (
L)
....................................
750
$4,500 x 1/6 =
Storage revenue (+R, +SE)
................................
750
$750 earned
e.
Depreciation expense (+E,
SE)
...................................
22,000
Given
Accumulated depreciation (+XA,
A)
22,000
f.
Supplies expense (+E,
SE)
..........................................
50,100
$16,500 +
Supplies (
A)
........................................................
50,100
$46,000 – $12,400
= $50,100 used
g.
Wages expense (+E,
SE)
.............................................
3,800
Given
Wages payable (+L)
............................................
3,800
4-18
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