Question
Use the following information to answer questions 1-5. The Aggie Graphics Company was organized on January 1, 2017. The trial balance before adjustment at December
Use the following information to answer questions 1-5.
The Aggie Graphics Company was organized on January 1, 2017.
The trial balance before adjustment at December 31, 2017 contained the following account balances:
Cash | $9,500 | |
Accounts Receivable | 4,000 | |
Prepaid Insurance | 1,800 | |
Equipment | 45,000 | |
Accumulated Depreciation | 4,500 | |
Accounts Payable | 3,500 | |
Notes Payable | 18,000 | |
Common Stock | 5,000 | |
Retained Earnings | 12,000 | |
Dividend | 2,000 | |
Graphic Fees Earned | 52,100 | |
Consulting Fees Earned | 5,000 | |
Salaries Expense | 30,000 | |
Supplies Expense | 2,700 | |
Advertising Expense | 1,900 | |
Rent Expense | 1,500 | |
Utilities Expense | 1,700 | |
$100,100 | $100,100 |
Analysis reveals the following additional data: (Assume the books are only closed at year end)
(A) The $2,700 balance in Supplies Expense represents supplies purchased in January. At December 31, there was $1,200 of supplies on hand.
(B) The note payable was issued on September 1. It is a 3% 6-month note.
(C) The balance in Prepaid Insurance is the premium paid on a one-year policy, dated March 1, 2017.
(D) Consulting Fees are credited to revenue when received. At December 31, consulting fees of $1,000 contracted for January, 2017 have yet to be performed.
(E) The equipment was purchased on January 1, 2017. It has a 10-year useful life and no salvage value.
The entry to record (A) above would include a debit to: (Assume the company is only making one adjusting entry to record this information)
A. | Supplies for $1,500 | |
B. | Supplies for $1,200 | |
C. | Supply Expense for $1,200 | |
D. | Prepaid Supply Expense for $2,700 |
1 points
QUESTION 2
What is the balance in the interest payable account after adjustment?
A. | $ 45 | |
B. | $180 | |
C. | $90 | |
D. | $270 |
1 points
QUESTION 3
The correct entry to record (E) above is:
A. | Depreciation Expense 4,500 Accumulated Depreciation 4,500 | |
B. | Depreciation Expense 9,000 Accumulated Depreciation 9,000 | |
C. | Depreciation Expense 9,000 Equipment 9,000 | |
D. | Depreciation Expense 9,000 Accumulated Depreciation 4,500 Equipment 4,500 | |
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