12.The Pacioli Company rents numerous properties throughout the year. Pacioli pays rents in advance in some cases, and in others, rents are paid after the rental period expires. The following data are included in Pacioli's December 31 balance sheets: Prepaid Rents Rent Payable During 2007, Pacioli paid $200,000 in rentals. In its income statement for the year ended December 31, 2007, Pacioli should report rent expense of a. $145,000 b. $175,000 c. $200,000 d. $225,000 $30,000 $35,000 $70,000 $50,000 13 KPMG failed to make the adjusting entry to record the unpaid wages of its employees as of December 31. This error will cause a. an overstatement of assets, liabilities, and owners' equity an understatement of expenses, liabilities, and owners' equity an understatement of liabilities and an overstatement of owners' equity d. an understatement of assets and liabilities 14.On October 1, 2007, ABC, Inc. borrowed S4,000 on a 12%, one-year note payable. Interest was payable semiannually. A correct adjusting entry was made on December 31, 2007, and a correct reversing entry was made on January 1, 2008. The entry that should be made on March 31, 2008. a. Interest Payable b. Interest Expense 240 240 120 Interest Payable c. Interest Expense d. Interest Expense 240 240 15. Which of the following adjusting entries would not be reversed in the following accounting period? a. an entry that recognized an accrued expense of the current period b. an entry that allocated the expired portion of a long-lived asset to the current year's income statement c. an entry that transferred a portion of a revenue account to a liability account d. an entry that recognized an accrued revenue earned during the current period