Week 2 Homework Fill in the blanks (5 pts each) 1. The assets which do not have a physical form are called ______________. 2. Unearned Revenue is a ________ account and carries a ________ normal balance. 3. A depreciable asset's cost minus accumulated depreciation is called ______________. 4. As per the _________________________, the entity will remain in operation for the foreseeable future. Multiple choice (5 pts each) (highlight or clearly mark your answer) 1. If a company is using the accrual basis accounting method, when should it record its earned revenue? A) When cash is received, even though services may be rendered at a later date B) When services are rendered, even though cash may be received at a later date C) When services are completely rendered and cash is received D) When cash is received, 30 days after the completion of the services 2. An adjusting entry is completed: A) at the beginning of the accounting period. B) at the end of the accounting period. C) when the balance sheet is prepared. D) when accounts need to be balanced in the ledger. 3. Qwerty Inc. prepaid $3,600 on November 1, 2014 for a one-year insurance premium. On January 1, 2015 of the next year (after December 31 adjustments), the Prepaid Insurance account will have a debit balance of: A) $3,300. B) $3,900. C) $3,600. D) $3,000. 4. Which of the following is a contra account? A) Depreciation Expense B) Accumulated Depreciation C) Unearned Revenue D) Earned Revenue Problems (10 pts each) (please show your work for partial credit) 1. Deborah Consultants had the following balances before passing adjusting entries in the books on December 31, 2015. Cash $6,000 Deborah, Withdrawals $3,000 Accounts Receivable 2,000 Service Revenue 10,600 Office Supplies 1,800 Salaries Expense 4,000 Equipment 15,000 Rent Expense 800 Accumulated Depreciation Depreciation Expense Equipment 9,000 Equipment 1,500 Deborah, Capital 15,000 Supplies Expense 500 Prepare the adjusted trial balance after considering these adjustments: a. Office Supplies used, $800. Assume the office supplies were initially recorded as an asset. b. Accrued salaries on December 31, $600. c. Revenue accrued but not recorded, $200. 2. A company received $5,000 for 100 one-year subscriptions on July 1. The journal entry to record this is 3. On July 1, Alpha Company paid rent of $15,000 for a small equipment storage area for the period of July 1 till December 31. Provide the adjusting journal entry on July 31. Assume the prepaid expense is initially recorded as an asset. 4. ABC Company signed a one-year $48,000 note payable at 8% interest on May 1, 2014. If ABC only adjusts their accounts once a year at year-end, how much interest expense was accrued on December 31, 2014? 5. The balances of select accounts of Sandra Company as at December 31, 2015 are given below: Debit Credit Building $120,000 Cash 5,000 Office Supplies 700 Furniture 3,000 Prepaid Insurance 450 Accumulated DepreciationFurniture $1,000 Land 35,000 Accumulated DepreciationBuilding 4,800 Accounts Receivable 2,500 The insurance has been prepaid for the next half year. What are the total current assets that would be shown on the balance sheet? 6. Education for All sells tickets in advance for their weekly productions and records the proceeds as Unearned Revenue. At the end of each month, Education for All makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $4,000. During March, they sold 300 tickets at $20 each and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March