120 Chapter 3 The Accounting Information iystem entries and why are they yele Do they sned pubed, why ane beglnning acerued salaries and wa subtracted feos, and ending accrued salaries and wage added to, salaries and wages paid during the year 10, A worksht is a germanen yos apee ue is rmquied in the acemnting ee Esplain two types of transactions that would ceive diffr ent acounting treatment using (a) striet cash b accounvting, and (o) a modified cash bs t7 Li BRIEF EXERCISES 0E3-1 L.om Thansections foe Mehla Company for the month of May are presented below Prepone prurmal entries for each af these transactios(You may onit esplanations) RD Ms invets $4,000cah in escthange for common sock in asmall welding coeporatio Bays egipment on acount e S10 May 1 Nils Noble Corp 8300 for welding wok done BE3-2 (L02) Aganai Repair Shop had the following transactions during the first month of business as a proprietorship Jour- nalize the transactions. (Omit explanations) Aug 2 nested $12,000 cash and $2,5400 of equipment in the busine Punched supplies on account oe 00 Dbit asset accot 12 Performed services for cients, foe which $1,300 was collected in cash and 5600 was biled to the clients S Paid Asust rent 600 9 Courned supples and deermined that only $2% of the uppis purchoned on August 7 ane still on hand BE3-3 (L02,3) On July 1,2017, Crowe Co pays $15,000 to Zubin Insurance Co. for a 3year insurance policy. Both com- panhave al yeingevmber S1. For Chowe Co,iethe entry an Jwly T and the aduting entry on b DE3-4 8.02, Using the data in BE3-3 journalize the entry on July 1 and the adjusting entry on December 31 for Zubin Insur ance Co. Zubin uses the accounts Unearned Service Revenue and Service Revenue BE3-5 (L02,3) Assume that on February 1, Procter & Gamble (P&Gi paid $720,000 in advance for 2 years' insurance cover- age Prepare P&G's Febnuary 1 journal entry and the annual adjusting entry on June 30 BE3- (1.02,3) LaBouche Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash payment of $2,400 received in advance. Prepare LaBouche's November 1 journal entry and the December 31 annual adjusting entry DE3-7 (L02,3) Dresser Company's weekly payroll, paid on Fridays, t Dresser's adjusting entry on Wednesday, December 31, and the journal entry to record the $8,000 cash payment on Friday January 2 totals 58,000 Employees work a S-day week. Prepare 0E3-8 (L03) Included in Gonzalez Company's December 31 trial balance is a note receivable of $12.000 The note is a 4-month, 1osi note dated Oxtober 1. Prepare Gonzalez's December 31 adjusting entry to record 5300 of accrued interest, and the February l journal entry to record receipt of SZA00 from the borrower. BE3-9 B.O3) Pepare the folowing adjuasting entries at August 31 for Walgreens a) Interest on notes payable of $300 is acrued b) Services performed but unbilled total S1,400 () Salaries and wages eamed by employes of 700 have not been mconded d) Bad debt expense for year is $900 he following account titles Service Revenue Uise t Accounts Rececivable, Interest Expense, Interest Payable, Salaries and Wages Expense, Salaries and Wages Payable, Allowance for Doubtful Accounts, and Bad Debt Expense. of its first year of operations, the trial balance of Alonzo Company shows Equipment $30,000 and Depreciation for the year is estimated to be zero balances in Accumulated Depreciat $2,000. Prepare the adjusting entry for depreciation at December 31, and indicate the balance sheet presentation for the equip- ment at December 31 BRIEF EXERCISES oEa o) Taactions for Mahta Company for the month of May are presented below Prepare journal entries for each o these transactions. (You may omit explanations May L.D, Mehta invests $4,000 cash in exchange for common stock in a small welding corporation 3 Bays equipment on account for $1,100 13 Pays 5400 to landlord for May rent 21 Bills Noble Corp. $500 for welding work done BE3-2 (L.02) Agazzi Repair Shop had the following transactions during the first month of business as a proprietorship. Jour nalize the transactions. (Omit explanations) Aug. 2 Invested $12000 cash and $2,500 of equipment in the business P'urchased supplies on account for s500 (Debit asset account.) 12 Performed services for dlients, for which $1,300 was collected in cash and $670 was billed to the clients 15 Paid August rent 5600 19 Counted supplies and determined that only $270 of the supplies purchased on August 7 are still on hand BE3-3 (LO2,3) On July 1, 2017, Crowe Co, pays $15,000 to Zubin Insurance Co. for a 3-year insurance policy, Both com nies have fiscal years ending December 31. For Crowe Co, journalize the entry on July 1 and the adjusting entry on Decem- ber 31 BE3-4 (L02,3) Using the data in BE3-3, journalize the entry on July 1 and the adjusting entry on December 31 for Zubin Insur- ance Co. Zubin uses the accounts Unearned Service Revenue and Service Revenue BE3-5 (L02,3) Assume that on February 1, Procter&Gamble (P&G) paid $720,000 in advance for 2 years' insurance cover Prepare P&G's February 1 journal entry and the annual adjusting entry on June 30 BE3-6 (L02,3) LaBouche Corporation owns a warehouse. On November 1, it rented storage space to a lessee (tenant) for 3 months for a total cash payment of $2,400 received in advance. Prepare LaBouche's November 1 journal entry and the December 31 annual adjusting entry DE3-7 (L02,3) Dresser Company's weekly payroll, paid on Fridays, totals $8,000. Employees work a 5-day week. Prepare Dresser's adjusting entry on Wednesday, December 31, and the journal entry to record the 58,000 cash payment on Friday January 2 BE3-8 (L.03) Included in Gonzalez Company's December 31 trial balance is a note receivable of $12,000. The note is a 4-month, 10% note dated October 1 Prepare Gonzalez's December 31 adjusting entry to record S300 of accrued interest, and the February I journal entry to record receipt of $12,400 from the borrower DE3-9 (LO3) Prepare the following adjusting entries at August 31 for Walgreens a) Interest on notes payable of $300 is accrued. b) Services performed but unbilled total $1,400. laries and wages earned by employees of $700 have not been recorded Bad debt expense for year is $900 (d) Use the following account titles Service Revenue,Accounts Receivable, Interest Expense, Interest Payable, Salaries and Wages Expense, Salaries and Wages Payable, Allowance for Doubtful Accounts, and Bad Debt Expense BE3-10 (L03) At the end of its first year of operations, the trial balance of Alonzo Company shows Equipment $30,000 and ro balances in Accumulated Depreciation-Equipment and Depreciation Expense. Depreciation f 52,000. Prepare the adjusting entry for depreciat ment at December 31 for the year is estimated to be tion at December 31, and indicate the balance sheet presentation for the e