"Exercise 3-1 Determining assets and expenses for accrual and cash accounting C1 On March 1, Year 1, a company paid an $18,000 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table.

"Exercise 3-1

Determining assets and expenses for accrual and cash accounting

C1

On March 1, Year 1, a company paid an $18,000 premium on a 36-month insurance policy for coverage beginning on that date. Refer to that policy and fill in the blanks in the following table.

Balance Sheet: Prepaid Insurance Income Statement: Insurance Expense

Accrual Basis Cash Basis Accrual Basis Cash Basis

Dec. 31 year 1	$	$	Year 1	$	$
Dec. 31 year 2			Year 2
Dec. 31 year 3			Year 3
Dec. 31 year 4			Year 4

Total $__________ $__________

"Exercise 3-3 Determining when to recognize expenses C1 For each of the following separate situations, determine the amount of expense each company should recognize in December (using accrual basis accounting). a.Chipotle has monthly wages expense of $3,200 that has been incurred but not paid as of December 31. b.United Airlines purchases a 24-month insurance policy for $48,000 on December 1 for immediate coverage. c.On December 15, Pfizer prepays $20,000 for hotel rooms for its January sales meeting."

"Exercise 3-11 Preparing adjusting entriesaccrued revenues and expenses P3 P4 Prepare year-end adjusting journal entries for M&R Company as of December 31 for each of the following separate cases. Entries can draw from the following partial chart of accounts: Cash; Accounts Receivable; Interest Receivable; Equipment; Wages Payable; Salary Payable; Interest Payable; Lawn Services Payable; Unearned Revenue; Services Revenue; Interest Revenue; Wages Expense; Salary Expense; Supplies Expense; Lawn Services Expense; and Interest Expense. 126a.M&R Company provided $2,000 in services to customers in December, which are not yet recorded. Those customers are expected to pay the company in January following the companys year-end. b. Wage expenses of $1,000 have been incurred but are not paid as of December 31. c. M&R Company has a $5,000 bank loan and has incurred (but not recorded) 8% interest expense of $400 for the year ended December 31. The company will pay the $400 interest in cash on January 2 following the companys year-end. d. M&R Company hired a firm that provided lawn services during December for $500. M&R will pay for December lawn services on January 15 following the companys year-end. e.M&R Company has earned $200 in interest revenue from investments for the year ended December 31. The interest revenue will be received on January 15 following the companys year-end. f.Salary expenses of $900 have been earned by supervisors but not paid as of December 31."

Problems 3-1A and 3-6

"Problem SET A Problem 3-1A Identifying adjusting entries with explanations P1 P2 P3 P4 For journal entries 1 through 12, indicate the explanation that most closely describes it. You can use explanations more than once. A. To record receipt of unearned revenue. B. To record this periods earning of prior unearned revenue. C. To record payment of an accrued expense. D. To record receipt of an accrued revenue. E. To record an accrued expense. F. To record an accrued revenue. G. To record this periods use of a prepaid expense. H. To record payment of a prepaid expense. I. To record this periods depreciation expense."