Chapter 3: Q16SE_2 (page 161)
On October 1, 2018, Kitchen Design paid $15,000 for store rent covering the six-month period ending March 31, 2019.
Date | Account and Explanation | Debit | Credit |
March 31, 2019 | Rent Expense | $15,000 | |
Prepaid Rent | $15,000 | ||
To record rent expense |
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Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130
On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero. Requirements 1. Calculate the amount of depreciation for the month of October using the straightline depreciation method. 2. Record the adjusting entry for depreciation on October 31. 3. Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation— Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at October 31. 4. What is the computer equipment’s book value on October 31?
What is an accrued expense? Provide an example.
On October 1, 2018, Kitchen Design paid $15,000 for store rent covering the six-month period ending March 31, 2019.
Refer to the data in Exercise E3-25, and prepare an adjusted trial balance.
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