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Quick Study 3-15 (15 minutes)
Accounts Debited and Credited Financial Statement
a. Debit Unearned Revenue Balance Sheet
Credit Revenue Earned Income Statement
b. Debit Wages Expense Income Statement
Credit Wages Payable Balance Sheet
Quick Study 3-16 (15 minutes)
Explanation:
Insurance premium error:
Understates expenses (and overstates assets) by........... $3,200
Accrued salaries error:
Understates expenses (and understates liabilities) by.... 2,000
Combination of errors:
Quick Study 3-17 (10 minutes)
Explanation
The debit balance in Prepaid Insurance was reduced by $400, implying a $400
forwarded, distributed, or posted on a website, in whole or part.
Quick Study 3-18 (10 minutes)
Quick Study 3-19 (10 minutes)
performance.
Quick Study 3-20A (5 minutes)
Quick Study 3-21 (15 minutes)
Dec. 31 Services Revenue......................................... 13,000
Income Summary.................................. 13,000
To close the revenue account.
31 Income Summary.......................................... 10,000
Wages Expense..................................... 8,400
Rent Expense......................................... 1,600
To close the expense accounts.
Quick Study 3-22 (5 minutes)
Quick Study 3-23 (5 minutes)
1. (e) Analyzing transactions and events.
2. (h) Journalizing transactions and events.
3. (a) Posting the journal entries.
Quick Study 3-24 (10 minutes)
1. B
2. F
Quick Study 3-25 (5 minutes)
Current assets
Cash............................................................ $ 7,000
Accounts receivable.................................. 18,000
Office supplies........................................... 2,800
Prepaid insurance...................................... 3,560
Quick Study 3-26B (20 minutes)
Planta Company
Work Sheet
Adjusted
Trial Balance
Income
Statement
Balance Sheet
No. Account Dr. Cr. Dr. Cr. Dr. Cr.
10
1
Cash.................................... 7,000 7,000
10
6
Accounts receivable.......... 27,200 27,200
15
3
Trucks................................. 42,000 42,000
7
31
8
Retained earnings.............. 45,500 45,500
31
9
Dividends............................ 15,400 15,400
40
1
Plumbing fees earned........ 84,000 84,000
61
1
Depreciation expense—
Trucks............................... 6,500 6,500
62
2
Salaries expense................ 38,000 38,000
forwarded, distributed, or posted on a website, in whole or part.
Quick Study 3-27C (10 minutes)
2014—NOT required (2014 shown for instructional purposes only)
Dec. 31 Accounts Receivable............................................ 12,000
Management Fees Earned.......................... 12,000
To record accrued revenue.
2015
Jan. 1 Management Fees Earned ............................ 12,000
EXERCISES
Exercise 3-1 (15 minutes)
a. Adjusting entry:
2015
Dec. 31 Wages Expense..............................................................
1,250
Wages Payable....................................................... 1,250
b. Payday entry:
Exercise 3-2 (25 minutes)
a.
Apr. 30 Legal Fees Expense............................................ 3,500
Legal Fees Payable..................................... 3,500
To record accrued legal fees.
May 12 Legal Fees Payable............................................. 3,500
Cash.............................................................. 3,500
To pay accrued legal fees.
b.
May 3 Salaries Payable.................................................. 4,000
Salaries Expense*............................................... 6,000
Cash.............................................................. 10,000
To record payment of accrued and current
salaries. *($10,000 weekly salaries x 3/5 week)
Exercise 3-3 (25 minutes)
a. Depreciation Expense—Equipment................................. 18,000
Accumulated Depreciation—Equipment..................... 18,000
To record depreciation expense for the year.
b. Insurance Expense............................................................ 4,900
Prepaid Insurance*........................................................ 4,900
To record insurance coverage that expired
($6,000 - $1,100).
f. Wages Expense................................................................. 3,200
Wages Payable.............................................................. 3,200
To record wages accrued but not yet paid.
Notes:
Prepaid Insurance*Office Supplies**
