Miscellaneous adjusting entries.

a. Whenever the firm makes payments for wages, it debits Wage Expense. At the start of April, the Wages Payable account had a balance of \(\$ 5,000\), representing wages earned but not paid during the last few days of March. During April, the firm paid \(\$ 30,000\) in wages, debiting the entire amount to Wage Expense. At the end of April, analysis of amounts earned since the last payday indicates that employees have earned wages of \(\$ 4,000\) that they have not received. These are the only unpaid wages at the end of April. Construct the required adjusting entry. What is Wage Expense for April?

b. A firm purchased an insurance policy providing one year's coverage from May 1, Year 1, and debited the entire amount to Insurance Expense. After the firm made adjusting entries, the balance sheet on December 31, Year 1, correctly showed Prepaid Insurance of \(\$ 3,000\). Construct the adjusting entry that the firm must make on January 31, Year 2, if the firm closes its books monthly and prepares a balance sheet for January 31, Year 2.

c. The record-keeping system for an apartment building instructs the bookkeeper always to credit rent revenue when the firm collects a payment from tenants. At the beginning of Year 3, the liability account Advances from Tenants had a credit balance of \(\$ 25,000\), representing collections from tenants for rental services to be rendered during Year 3. During Year 3, the firm collected \(\$ 250,000\) from tenants; it debited Cash and credited Rent Revenue. It made no adjusting entries during Year 3. At the end of Year 3, analysis of the individual accounts indicates that of the amounts already collected, \(\$ 30,000\) represents collections for rental services to be provided to tenants during Year 4. Present the required adjusting entry. What is Rent Revenue for Year 3?

d. When the firm acquired new equipment costing \(\$ 10,000\) on January 1, Year 1, the bookkeeper debited Depreciation Expense and credited Cash for \(\$ 10,000\) but made no further entries for this equipment during Year 1. The equipment has an expected service life of five years and an estimated salvage value of zero. Construct the adjusting entry required before the accountant can prepare a balance sheet for December 31, Year 1.

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EXHIBIT 3.15 BOSWORTH COMPUTER REPAIR SERVICES Adjusted, Post-Closing Trial Balance June 30, Year 8 (Problem 27) Cash Repair Parts Inventory Office Supplies Inventory Equipment Accumulated Depreciation Accounts Payable .. Common Stock Retained Earnings $ 4,800 1,500 200 5,500 $ 750 6,250 1,250 3,750 $12,000 $12,000