AECH3
3
CHAPTER 3 Adjusting the Accounts Answer BRIEF EXERCISES 1. July 1 Prepaid Insurance............... 15,000 Cash.......................... 15,000 Dec. 31 Insurance Expense............... 2,500 Prepaid Insurance............. 2,500 2. July 1 Cash............................ 15,000 Unearned Insurance Revenue.... 15,000 Dec. 31 Unearned Insurance Revenue...... 2,500 Insurance Revenue............. 2,500 3. 1. Dec. 31 Interest Expense........... 300 Interest Payable.......... 300 2. 31 Accounts Receivable......... 1,250 Service Revenue........... 1,250 3. 31 Salaries Expense............ 900 Salaries Payable.......... 900 4. LUMAS COMPANY Incomes Statement For the Year Ended December 31, 2002 Revenues Service revenue......................... ........................................$38,400 Expenses Salaries expense........................ $13,000
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Transcript of AECH3
CHAPTER 3 Adjusting the Accounts
CHAPTER 3 Adjusting the AccountsAnswer
BRIEF EXERCISES1.July 1 Prepaid Insurance 15,000 Cash 15,000
Dec. 31 Insurance Expense 2,500
Prepaid Insurance 2,5002.July 1 Cash 15,000
Unearned Insurance Revenue 15,000
Dec. 31 Unearned Insurance Revenue 2,500
Insurance Revenue 2,5003.1. Dec. 31 Interest Expense 300 Interest Payable 3002. 31 Accounts Receivable 1,250 Service Revenue 1,2503. 31 Salaries Expense 900 Salaries Payable 9004.LUMAS COMPANYIncomes Statement
For the Year Ended December 31, 2002
RevenuesService revenue
$38,400ExpensesSalaries expense
$13,000
Rent expense
4,000
Insurance expense
2,000
Supplies expense
1,500
Depreciation expense
1,300Total expenses
21,800Net income
$16,600
5.LUMAS COMPANYOwners Equity Statement
For the Year Ended December 31, 2002
Capital, January 1
$15,600Add: Net income
16,600
32,200Less: Drawings
6,000Capital, December 31
$26,200
EXERCISES1. Mar. 31 Depreciation Expense ($2503) 750
Accumulated Depreciation Equipment 7502. 31 Unearned Rent 3,300
Rent Revenue($9,9001/3) 3,3003. 31 Interest Expense 500
Interest Payable 500
4. 31 Supplies Expense 2,150 Supplies($2,800$650) 2,1505. 31 Insurance Expense($3003) 900 Prepaid Insurance 900
