Fundamental Accounting Principles
23rd Edition
ISBN: 9781259536359
Author: John J Wild, Ken Shaw Accounting Professor, Barbara Chiappetta Fundamental Accounting Principles
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 3, Problem 6APSA
Problem 3-6A
Recording prepaid expenses and unearned revenues
P1 P4
Gomez Co. had the following transactions in the last two months of its year ended December 31. (Entries can draw from the following partial chart of accounts: Cash; Prepaid Insurance; Prepaid Advertising; Prepaid Consulting Fees; Unearned Service Fees; Services Fees Earned; Insurance Expense; Advertising Expense; Consulting Fees Expense.)
Nov. 1- Paid $1,800 cash for future newspaper advertising.
1- Paid $2,460 cash for 12 months of insurance through October31 of the next year.
30- Received $3,600 cash for future services to be provided to a customer.
Dec. 1- Paid $3,000 cash for a consultant’s services to be received over the next three months.
15- Received $7,950 cash for future services to be provided to a customer.
31 Of the advertising paid for on November 1, $1,200 worth is not yet used.
31- A portion of the insurance paid for on November 1 has expired. No adjustment was made in November to Prepaid Insurance.
31- Services worth $1,500 are not yet provided to the customer who paid on November
30.
31- One-third of the consulting services paid for on December 1 have been received.
31- The company has performed $3,300 of services that the customer paid for on December 15.
Required
1. Prepare entries for these transactions under the method that initially records prepaid expenses as assets and records unearned revenues as liabilities. Also prepare
2. Prepare entries for these transactions under the method that initially records prepaid expenses as expenses and records unearned revenues as revenues. Also prepare adjusting entries at the end of the year.
Analysis Component
3. Explain why the alternative sets of entries in requirements 1 and 2 do not result in different financial statement amounts.
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Journalize the following assuming a 360-day year is used for interest computations using the chart of accounts below.
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nter your answers into the table below.
ey the account names carefully (exactly as shown above) and follow formatting instructions below.
ONOT USEA DECIMAL WITH ZEROES FOR WHOLE DOLLAR AMOUNTS AND USE COMMAS APPROPRIATELY.
HEN THE DEBIT/CREDIT DOES NOT REQUIRE AN ENTRY, LEAVE IT BLANK.
equired, round your answers to two decimal places.
Date
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r. 30
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Chapter 3 Solutions
Fundamental Accounting Principles
Ch. 3 - Prob. 1DQCh. 3 - Prob. 2DQCh. 3 - Prob. 3DQCh. 3 - Prob. 4DQCh. 3 - Prob. 5DQCh. 3 - Prob. 6DQCh. 3 - What is an accrued revenue? Give an example..Ch. 3 - Prob. 8DQCh. 3 - Prob. 9DQCh. 3 - Prob. 10DQ
Ch. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 1QSCh. 3 - Prob. 2QSCh. 3 - Prob. 3QSCh. 3 - Prob. 4QSCh. 3 - Prob. 5QSCh. 3 - Prob. 6QSCh. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Prob. 15QSCh. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Prob. 19QSCh. 3 - Prob. 20QSCh. 3 - Prob. 21QSCh. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Problem 3-1A Identifying adjusting entries with...Ch. 3 - Prob. 2APSACh. 3 - Prob. 3APSACh. 3 - Problem 3.4* Interpreting unadjusted and adjusted...Ch. 3 - Problem 3-5A Preparing financial statements from...Ch. 3 - Problem 3-6A Recording prepaid expenses and...Ch. 3 - Prob. 1BPSBCh. 3 - Prob. 2BPSBCh. 3 - Prob. 3BPSBCh. 3 - Prob. 4BPSBCh. 3 - Prob. 5BPSBCh. 3 - Prob. 6BPSBCh. 3 - Prob. 3SPCh. 3 - Prob. 1GLPCh. 3 - Prob. 2GLPCh. 3 - Prob. 3GLPCh. 3 - Prob. 4GLPCh. 3 - Prob. 5GLPCh. 3 - Prob. 1BTNCh. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Access EDGAR online (SEC.gov) and locate the 10-K...Ch. 3 - Prob. 6BTNCh. 3 - Prob. 7BTNCh. 3 - Prob. 8BTNCh. 3 - Prob. 9BTN
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