Concept explainers
Exercise 3-6 Preparing
Prepare adjusting
a. Depreciation on the company's equipment for the year is computed to be $I8,000.
b. The Prepaid Insurance account had a $6,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $1, 100 of unexpired insurance coverage remains.
C. The Supplies account had a $700 debit balance at the beginning of the year; and $3,480 of supplies were purchased during the year. The December 31 physical count showed $300 of supplies available.
Check (c) Dr. Supplies Expense, $3,880 Page113
d. Two-thirds of the work related to $15,000 of cash received in advance was performed this period.
e. The Prepaid Rent account had a $6,800 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $5,800 of prepaid rent had expired.
(e) Dr. Rent Expense, $5,SCO
f. Wage expenses of $3,200 have been incurred but are not paid as of December 31.
Page 114

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Chapter 3 Solutions
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