Title: Quick Study 3-19
QA_Ori:
a. Step 1: Accounts Receivable equals $0
b. Step 1: Interest Receivable equals $0
c. Step 1: Accounts Receivable equals $0
b. Step 1: Interest Receivable equals $0
c. Step 1: Accounts Receivable equals $0
Title: Exercise 3-1
QA_Ori:
1. E
2. C
Title: Exercise 3-2
QA_Ori:
a. Depreciation Expense—Equipment…………………………… 18,000
b. Insurance Expense………………………………………………….. 4,900
c. Office Supplies Expense………………………………………….. 3,882
d. Unearned Fee Revenue…………………………………………… 10,000
e. Insurance Expense………………………………………………….. 5,800
f. Wages Expense……………………………………………………… 3,200
Notes:
Prepaid Insurance*Office Supplies**
? Used ? Used
Title: Exercise 3-3
QA_Ori:
a. Unearned Fee Revenue…………………………………………… 5,000
b. Wages Expense……………………………………………………… 8,000
c. Depreciation Expense—Equipment…………………………… 18,531
d. Office Supplies Expense………………………………………….. 4,992
e. Insurance Expense………………………………………………….. 2,800
f. Interest Receivable………………………………………………….. 1,050
g. Interest Expense…………………………………………………….. 2,500
Notes:
Prepaid Insurance†Office Supplies*
Title: Exercise 3-4
QA_Ori:
a. Adjusting entry:
2013
Dec. 31 Wages Expense………………………………………………………1,250
b. Payday entry:
2014
Jan. 4 Wages Expense………………………………………………………3,750
Title: Exercise 3-5
QA_Ori:
a
. 30-Apr Legal Fees Expense 3,500
b
. 30-Apr
Interest Expense 3,000
20-May Interest Payable 3,000
c.
30-Apr Salaries Expense 4,000
3-May Salaries Payable 4,000
Title: Exercise 3-6
QA_Ori:
a. Supplies expense for current year: $2,550
Proof:
(a) (b) (c) (d)
Supplies available – prior year-end…….. $ 400 $1,200 $ 1,260 $2,288
Supplies purchased in current year…….. 2,800 6,500 8,490 3,000
Title: Exercise 3-7
QA_Ori:
31-Dec Accounts Receivable
2,10
0
31-Dec Unearned Fees
4,90
0
31-Dec Depreciation Expense—Computers
1,60
0
31-Dec Depreciation Expense—Office Furniture
1,85
0
31-Dec Salaries Expense
2,25
0
Salaries Payable 2,250
31-Dec Office Supplies Expense 580
31-Dec Utilities Expense 90
Title: Exercise 3-8
QA_Ori:
Balance Sheet Insurance Asset using Insurance Expense using
Accrual
Basis*
Cash
Basis
Accrual
Basis**
Cash
Basis
Explanations:
*Accrual asset balance equals months left in the policy x $500 per month
(monthly cost is computed as $18,000 / 36 months).
Months Left
Balanc
e
12/31/201
1 26
$13,00
0
**Accrual insurance expense equals months covered in the year x $500 per
month.
Months Covered Expense
2011…………………………..10 $ 5,000
Title: Exercise 3-9
QA_Ori:
a. $ 4,361 / $ 44,500 = 9.8%
Analysis and Interpretation: Company c has the highest profitability according to
the profit margin ratio. Company c earns 43.3 cents in net income for every one
dollar of net sales earned.
Title: Exercise 3-10A
QA_Ori:
a.
Dec. 1 Supplies Expense 2,000
b.
Dec. 2 Insurance Expense 1,540
c.
Dec. 15 Cash
13,00
0
d.
Dec. 28 Cash 3,700
e.
Dec. 31 Supplies 1,840
f.
Dec. 31 Prepaid Insurance 1,200
g.
Dec. 31 Remodeling Fees Earned 11,130
