Ex3-1 In the blank space beside each aqjusting entry enter the letter of the explanation A through F that most closely describes the entry: A.To record this period's depreciation expense- B.To record accrued salaries expense- C.To record this period's use of a prepaid expense- D.To record accrued interest revenue. E.To record accrued interest expense F.To record the earning of previously unearned income.. -一一 1.Salaries Expense .. l3,280 Salaries payable.. l3,280 一一 2.lnterest Expense 2,208 lnterest Payable . 2,208 一一 3.lnsurance Expense ..... 3,l80 Prepald Insurance . 3,180 一一 4.Unearned Professional Fees l9,250 Professional Fees Earned . l9.250 一一 5. Interest Receivable . 3,300 Interest Revenue . 3,300 一 - 6.Depreciation Expense . 38,217 Accumulated Depreciation . 38,217 Ex3-2 For each of the following separate cases, prepare adjusting entries required for financial statements for the year ended (or date of)December 31,2005.(Assume that prepaid expenses are initially recorded in asset accounts and that fees collected in advance of work are initially recorded as liabilities.) a. One-third of the work related to$30,OOO cash received in advance is performed this period- b. Wages of $9,000 are earned by workers but not paid as of December 31,2005. c. Depreciation on the company's equipment for 2005is$19,127. d. The Office Supplies account had a $480 debit balance on December 31, 2004. During 2005,$5,349 of office supplies is purchased. A physical count of supplies at December 31, 2005, shows $587 of supplies available. e. The prepaid Insurance account had a $5,000balance on December 31,2004.An analysis of insurance policies shows that$2,2OO of unexpired insurance benefits remain at December 31, 2005. f. The company has earned (but not recorded) $750 of interest from investments in CDs for the year ended December 31,2005.The interest revenue will be received on January l0,2006. g. The company has a bank loan and has incurred (but not recorded) interest expenses of $3500 for the year ended December 31,2005.The company must pay the interest on January 2,2006. Ex3-9 Use the following information to compute profit margin for each separate company a through e.- Net Income Net Sales a.$5390 $44,83O b.87.644 398,954 c.93,385 257,082 d.$55,234 $1,458,999 e.70,158 435,925 which of the five companies is the most profitable according to the profit margin ratio? Interpret that company's profit margin ratio. Problem 3-2A Maja Co. follows the practice of recording prepaid expenses and unearned revenues in balance sheet accounts. Mqja's annual accounting period ends on December 31,2005.The following information concerns the adjusting entries to be recorded as of that date: a. The office Supplies account started the year with a $3,OOO balance. During 2005,thecompany purchased supplies for $12,400,which was added to the office Supplies account. The Inventory of supplies available at December 31,2005,totaled $2,640. b. An analysis of the company's insurance policies provided these facts: Policy Date of Purchase Coverage Cost A April 1.2004 24 15840 B April 1. 2005 36 13068 C August 1. 2005 12 2700 The total premium for each policy was paid in full (for all months)at the purchase date, and the Prepaid Insurance account was debited for the full cost.(Note that year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.) c. The company has 15employees,who earn a total of $2,lOO in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31,2005,is a Tuesday, and all 15employees worked the first two days of that week. Because New Year's Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6,2006. d. The company purchased a building on JaI111aq1,2005.It cost$855,OOO and is expected to have a$45,OOO salvage value at the end of its predicted30-year life. e. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at$2,4OO per month, starting on November L2005.The rent was paid on time on November l, and the amount received was credited to the Rent Earned account. However, the ten- ant has not paid the December rent-The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15.The tenant has agreed not to fall behind again. f. On November 1,the company rented space to another tenant for $2,175per month. The tenant paid five months, rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account. Required L Use the information to prepare adjusting entries as of December 31,2005. 2. Prepare journal entries to record the first subsequent cash transaction in 2006for parts c and e.
Pages to are hidden for
"in class exercise0612"Please download to view full document