E3-8 Adjustment for supplies Obj 3 a. $2.250 E3-9 Adjustment for prepaid insurance Obj 3 Answer each of the following independent questions concerning supplies and the adjustment for supplies. (a) The balance in the supplies account, before adjustment at the end of the year, is $3,175. What is the amount of the adjust- ment if the amount of supplies on hand at the end of the year is $925? (b) The supplies account has a balance of $600, and the supplies expense account has a balance of $1,850 at December 31, 2011. If 2011 was the first year of operations, what was the amount of supplies purchased during the year? The prepaid insurance account had a balance of $10,800 at the beginning of the year. The account was increased for $7,200 for premiums on policies purchased during the year. What is the adjustment required at the end of the year for each of the following independent situations: (a) the amount of unexpired insurance ap- plicable to future periods is $8,000, (b) the amount of insurance expired during the year is $12,675? For (a) and (b), indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease. E3-10 The balance in the unearned fees account, before adjustment at the end of the Adjustment for unearned fees year, is $27,300. What is the adjustment if the amount of unearned fees at the end of the year is $14,650? Indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease. Obj 3 E3-11 Adjustment for unearned revenue Obj 3 For the year ending June 30, 2008, Microsoft Corporation reported short-term unearned revenue of $13,397 million. For the year ending June 30, 2008, Microsoft also reported total revenues of $60,420 million. (a) Assuming that 116 Chapter 3 Microsoft recognized $3,000 million of unearned revenue as revenue during the year, what entry for unearned revenue did Microsoft make during the year? Indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease. (b) What percentage of total revenues is the short-term unearned revenue as of June 30, 2008? Round to one decimal place.