Module 2- Chapter 3 : Exercise 3 1.Listed below are accounts to use for transactions (a) through...

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Module 2- Chapter 3 : Exercise 3 1.Listed below are accounts to use for transactions (a) through (j), each identified by a number.Following this list are the transactions.You are to indicate for...

Module 2- Chapter 3 : Exercise 3

1.Listed below are accounts to use for transactions (a) through (j), each identified by a number.Following this list are the transactions.You are to indicate for each transaction the accounts that should be debited and credited by placing the account number(s) in the appropriate box.

1.	Accounts Payable
2.	Accounts Receivable
3.	Accumulated Depreciation—Office Equipment
4.	Building
5.	Owner’s Capital
6.	Cash
7.	Depreciation Expense—Office Equipment
8.	Owner’s Drawing
9.	Fees Earned
10.	Insurance Expense
11.	Insurance Payable
12.	Interest Expense
13.	Interest Payable
14.	Interest Receivable
15.	Land
16.	Notes Payable
17.	Office Supplies
18.	Office Supplies Expense
19.	Prepaid Insurance
20.	Unearned Fees
21.	Utilities Expense
22.	Utilities Payable

Transactions	Account(s) Debited	Account(s) Credited
a. Utility bill is received; payment will be made in 10 days.
b. Paid the utility bill previously recorded in transaction (a).
c. Bought a three-year insurance policy and paid in full.
d. Made an entry to adjust for the expired portion of the insurance premium.
e. Received $7,000 from a contract to perform accounting services over the next two years.
f. Made an entry to adjust for half of the services performed in (e).
g. Purchased office supplies, paying part cash and charging the balance on account.
h. Borrowed money from a bank and signed a note payable due in six months.
i. Recorded one month’s accrued interest on the note payable.
j. Depreciation is recorded on office equipment.

2.Prepare adjusting entries for the following transactions:

(a)	The beginning balance of the supplies account was $245.During the month the company bought additional supplies in the amount of $735.At the end of the month a physical inventory showed $343 of unused supplies.
(b)	The company has a 12% note payable in the amount of $17,000 due in six months. The interest expense of $170 for the month has not been recorded.
(c)	The company has two employees.The manager is paid on the fifteenth of every month for work performed during the first half of the month and on the first of the following month for the work performed during the second half of the month. His monthly salary is $5,500.The other employee is paid $650 for each five-day work week (Monday–Friday).The last day of the month fell on Thursday.
(d)	The unearned fees account shows a balance of $46,000.According to the manager 60% of that amount has been earned.
(e)	At the end of the month $5,700 of services had been performed but not yet billed.

3.REM Consulting is completing the accounting information processing at the end of the fiscal year, December 31.

The following trial balances are available.

Accounts	Unadjusted Trial Balance		Adjusted Trial Balance
	Debit	Credit	Debit	Credit
Cash	13,000		13,000
Accounts Receivable	1,500		1,800
Prepaid Insurance	600		200
Supplies	3,800		3,000
Machines	30,000		30,000
Accumulated Depreciation		12,000		17,500
Wages Payable				900
Unearned Fees		6,700		6,500
Owner’s Capital		24,000		24,000
Owner’s Drawing	4,800		4,800
Fees Earned		25,000		25,500
Wages Expense	14,000		14,900
Depreciation Expense			5,500
Supplies Expense			800
Insurance Expense			400
	67,700	67,700	74,400	74,400

(a) Reconstruct the adjusting entries and give a brief explanation of each.
(b) What is the amount of net income?

Answered Same DaySep 17, 2021

Khushboo · Accepted Answer

ransactions 
	Account(s) Debited 
	Account(s) Credited 
	a. Utility bill is received; payment will be made in 10 days
	21
	22
	b. Paid the utility bill previously recorded in transaction (a).
	22
	6
	c. Bought a three-year insurance policy and paid in full.
	19
	6
	d. Made an entry to adjust for the expired portion of the insurance premium.
	10
	19
	e. Received $7,000 from a contract to perform accounting services over the next two years.
	6
	9
	f. Made an entry to adjust for half of the services performed in (e).
	9
	20
	g. Purchased office supplies, paying part cash and charging the balance on account.
	17
	6,1
	h. Borrowed money from a bank and signed a note payable due in six months.
	6
	16
	i. Recorded one month’s accrued interest on the note payable.
	12
	13
	j. Depreciation is recorded on office equipment.

Module 2- Chapter 3 : Exercise 3 1.Listed below are accounts to use for transactions (a) through (j), each identified by a number.Following this list are the transactions.You are to indicate for...

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