Waterway Company has the following balances in selected accounts on December 31, 2020. Accounts Receivable $0 Accumulated Depreciation-Equipment 9,000 Interest Payable 0 Notes Payable 22,000 Prepaid Insurance 2,520 Salaries and Wages Payable 0 Supplies 3,800 Unearned Service Revenue 53,000 All the accounts have normal balances. The information below has been gathered at December 31, 2020. 1. Waterway Company borrowed $22,000 by signing a 12%, one-year note on August 1, 2020. 2. 3. A count of supplies on December 31, 2020, indicates that supplies of $910 are on hand Depreciation on the equipment for 2020 is $1,800. 4. Waterway Company paid $2,520 for 12 months of insurance coverage on May 1, 2020. 5. On November 1, 2020, Waterway collected $53,000 for consulting services to be performed from November 1, 2020, through March 31, 2021 6. Waterway performed consulting services for a client in December 2020. The client will be billed $6,400. 7. Waterway Company pays its employees total salaries of $14,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2020. No. Account Titles and Explanation Debit Credit 1. Interest Expense Interest Payable 2. Supplies Expense Supplies 3. Depreciation Expense Accumulated Depreciation-Equipment 4. Insurance Expense Prepaid Insurance 5. Unearned Service Revenue Service Revenue 6. Accounts Receivable Service Revenue 7. Salaries and Wages Expense Salaries and Wages Payable
Waterway Company has the following balances in selected accounts on December 31, 2020. Accounts Receivable $0 Accumulated Depreciation-Equipment 9,000 Interest Payable 0 Notes Payable 22,000 Prepaid Insurance 2,520 Salaries and Wages Payable 0 Supplies 3,800 Unearned Service Revenue 53,000 All the accounts have normal balances. The information below has been gathered at December 31, 2020. 1. Waterway Company borrowed $22,000 by signing a 12%, one-year note on August 1, 2020. 2. 3. A count of supplies on December 31, 2020, indicates that supplies of $910 are on hand Depreciation on the equipment for 2020 is $1,800. 4. Waterway Company paid $2,520 for 12 months of insurance coverage on May 1, 2020. 5. On November 1, 2020, Waterway collected $53,000 for consulting services to be performed from November 1, 2020, through March 31, 2021 6. Waterway performed consulting services for a client in December 2020. The client will be billed $6,400. 7. Waterway Company pays its employees total salaries of $14,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2020. No. Account Titles and Explanation Debit Credit 1. Interest Expense Interest Payable 2. Supplies Expense Supplies 3. Depreciation Expense Accumulated Depreciation-Equipment 4. Insurance Expense Prepaid Insurance 5. Unearned Service Revenue Service Revenue 6. Accounts Receivable Service Revenue 7. Salaries and Wages Expense Salaries and Wages Payable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Waterway Company has the following balances in selected accounts on December 31, 2020.
Accounts Receivable
$0
Accumulated Depreciation-Equipment
9,000
Interest Payable
0
Notes Payable
22,000
Prepaid Insurance
2,520
Salaries and Wages Payable
0
Supplies
3,800
Unearned Service Revenue
53,000
All the accounts have normal balances. The information below has been gathered at December 31, 2020.
1.
Waterway Company borrowed $22,000 by signing a 12%, one-year note on August 1, 2020.
2.
3.
A count of supplies on December 31, 2020, indicates that supplies of $910 are on hand
Depreciation on the equipment for 2020 is $1,800.
4.
Waterway Company paid $2,520 for 12 months of insurance coverage on May 1, 2020.
5.
On November 1, 2020, Waterway collected $53,000 for consulting services to be performed from November 1, 2020,
through March 31, 2021
6.
Waterway performed consulting services for a client in December 2020. The client will be billed $6,400.
7.
Waterway Company pays its employees total salaries of $14,000 every Monday for the preceding 5-day week (Monday
through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked
the last 3 days of 2020.
Transcribed Image Text:No. Account Titles and Explanation
Debit
Credit
1.
Interest Expense
Interest Payable
2.
Supplies Expense
Supplies
3.
Depreciation Expense
Accumulated Depreciation-Equipment
4.
Insurance Expense
Prepaid Insurance
5.
Unearned Service Revenue
Service Revenue
6.
Accounts Receivable
Service Revenue
7.
Salaries and Wages Expense
Salaries and Wages Payable
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