Chapter 3: Question 4BE (page 128)
BE3-4 (L02,3) Using the data in BE3-3, journalize the entry on July 1 and the adjusting entry on December 31 for Zubin Insurance Co. Zubin uses the accounts Unearned Service Revenue and Service Revenue.
The amount of service revenue is $2,500.
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(LO2,3) Dresser Company’s weekly payroll, paid on Fridays, totals \(8,000. Employees work 5-days week. Prepare Dresser’s adjusting entry on Wednesday, December 31, and the journal entry to record the \)8,000 cash payment on Friday, January 2.
Selected accounts of Urdu Company are shown below.
| Supplies | |||
Beg. Bal | 800 | 10 ⁄ 31 | 470 |
| Salaries and Wages Expense | |||
10 ⁄ 15 | 800 | ||
10 ⁄ 31 | 600 | ||
| Unearned Service Revenue | |||
10 ⁄ 31 | 400 | 10 ⁄ 20 | 650 |
| Service Revenue | |||
10 ⁄ 17 | 2,400 | ||
10 ⁄ 31 | 1,650 | ||
10 ⁄ 31 | 400 | ||
| Accounts Receivable | |||
10 ⁄ 17 | 2,400 | ||
10 ⁄ 31 | 1,650 | ||
| Salaries and Wages Payable | |||
10 ⁄ 31 | 600 | ||
| Supplies Expense | |||
10 ⁄ 31 | 470 | ||
Instructions
From an analysis of the T-accounts, reconstruct
(a) the October transaction entries, and
(b) the adjusting journal entries that were made on October 31, 2017. Prepare explanations for each journal entry
Agazzi Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions. (Omit explanations.) Aug. 2 Invested \(12,000 cash and \)2,500 of equipment in the business. 7 Purchased supplies on account for \(500. (Debit asset account.) 12 Performed services for clients, for which \)1,300 was collected in cash and \(670 was billed to the clients. 15 Paid August rent \)600. 19 Counted supplies and determined that only $270 of the supplies purchased on August 7 are still on hand.
Andrea Pafko, a fellow student, contends that the double-entry system means that each transaction must be recorded twice. Is Andrea correct? Explain.
E3-13 (Lo5,6) (Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue \(800,000, Delivery Expenses \)12,000, Sales Returns and Allowances \(24,000 and Sales Discounts \)15,000.
Instructions:
(a) Prepare the revenues section of the income statement.
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