Required: Hide 1. Prepare adjusting entries at December 31 for these four activities. Dec. 31 (Record use of prepaid insurance) Dec. 31 (Record use of utilities) Dec. 31 (Record use of equipment) Dec. 31 (Record use of prepaid advertising) 2. Conceptual Connection: What would be the effect on expenses if the adjusting entries were not made?a.SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 1 of Item 2b.SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 2 of Item 2c.SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 3 of Item 2d.SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 4 of Item 2Cumulative effect on expenses: SelectOverstatedUnderstatedCorrect 5 of Item 2by $ 7 O 59%Blackboard10:35 AMeast.cengagenow.comJLACICIO U J IU13.Check My Work14.15.еВook16.Exercise 3-4817.Expense AdjustmentsFaraday Electronic Service repairs stereos and DVD18.players. During 2013, Faraday engaged in the19.following activities:a. On September 1, Faraday paid Wausau Insurance$4,860 for its liability insurance for the next 12months. The full amount of the prepayment wasdebited to prepaid insurance.b. At December 31, Faraday estimates that $1,520 ofutility costs are unrecorded and unpaid.c. Faraday rents its testing equipment from JVCEquipment rent in the amount of $1,440 is unpaidand unrecorded at December 31.d. In late October, Faraday agreed to become thesponsor for the sports segment of the eveningnews program on a local television station. Thestation billed Faraday $4,350 for 3 months'sponsorship-November 2013, December 2013,and January 2014-in advance. When thesepayments were made, Faraday debited prepaidadvertising. At December 31, 2 months'advertising has been used and 1 month remainsunusedRequired:Hide

Attached are the adjusting entries to be posted on Dec 31 for transactions mentioned in the…

Answered: 7 O 59% Blackboard 10:35 AM…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Required:

Hide

1. Prepare adjusting entries at December 31 for these four activities.

Dec. 31

(Record use of prepaid insurance)

Dec. 31

(Record use of utilities)

Dec. 31

(Record use of equipment)

Dec. 31

(Record use of prepaid advertising)

2. Conceptual Connection: What would be the effect on expenses if the adjusting entries were not made?

a.	SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 1 of Item 2
b.	SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 2 of Item 2
c.	SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 3 of Item 2
d.	SelectExpenses would be overstated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and assets would be understated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be overstated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and liabilities would be understated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be overstated, net income and stockholders' equity would be overstated.Expenses would be understated and assets would be understated, net income and stockholders' equity would be overstated.Correct 4 of Item 2

Cumulative effect on expenses: SelectOverstatedUnderstatedCorrect 5 of Item 2by $

7 O 59%
Blackboard
10:35 AM
east.cengagenow.com
JLACICIO U J IU
13.
Check My Work
14.
15.
еВook
16.
Exercise 3-48
17.
Expense Adjustments
Faraday Electronic Service repairs stereos and DVD
18.
players. During 2013, Faraday engaged in the
19.
following activities:
a. On September 1, Faraday paid Wausau Insurance
$4,860 for its liability insurance for the next 12
months. The full amount of the prepayment was
debited to prepaid insurance.
b. At December 31, Faraday estimates that $1,520 of
utility costs are unrecorded and unpaid.
c. Faraday rents its testing equipment from JVC
Equipment rent in the amount of $1,440 is unpaid
and unrecorded at December 31.
d. In late October, Faraday agreed to become the
sponsor for the sports segment of the evening
news program on a local television station. The
station billed Faraday $4,350 for 3 months'
sponsorship-November 2013, December 2013,
and January 2014-in advance. When these
payments were made, Faraday debited prepaid
advertising. At December 31, 2 months'
advertising has been used and 1 month remains
unused
Required:
Hide

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.