Exercise 3-2 Preparing adjusting entries LO P1

a.Three-fourths of the work related to $13,000 cash received in advance is performed this period.b.Wages of $9,000 are earned by workers but not paid as of December 31, 2013.c.Depreciation on the companys equipment for 2013 is $12,040.d.The Office Supplies account had a $350 debit balance on December 31, 2012. During 2013, $5,473 of office supplies are purchased. A physical count of supplies at December 31, 2013, shows $597 of supplies available.

e.The Prepaid Insurance account had a $5,000 balance on December 31, 2012. An analysis of insurance policies shows that $2,300 of unexpired insurance benefits remain at December 31, 2013.

f.The company has earned (but not recorded) $700 of interest from investments in CDs for the year ended December 31, 2013. The interest revenue will be received on January 10, 2014.g.The company has a bank loan and has incurred (but not recorded) interest expense of $4,500 for the year ended December 31, 2013. The company must pay the interest on January 2, 2014.