ACCT 2301 Chapter 3 Exercises (Spring 2015)

Subject: Business / Accounting
Question
(Spring 2015 ACCT 2301 CRN 40969)

Assignment:

Ch 03 Ex 3-1

1.

award:
7 out of
7.00 points

Exercise 3-1 Preparing adjusting entries LO P1

a.

Depreciation on the company’s equipment for 2013 is computed to be $10,000.

b.

The Prepaid Insurance account had a $8,000 debit balance at December 31, 2013, before adjusting for the costs of any expired coverage. An analysis of the company’s insurance policies showed that $940 of unexpired insurance coverage remains.

c.

The Office Supplies account had a $350 debit balance on December 31, 2012; and $2,680 of office supplies were purchased during the year. The December 31, 2013, physical count showed $413 of supplies available.

d.

One-third of the work related to $15,000 of cash received in advance was performed this period.

e.

The Prepaid Insurance account had a $5,600 debit balance at December 31, 2013, before adjusting for the costs of any expired coverage. An analysis of insurance policies showed that $4,660 of coverage had expired.

f.

Wage expenses of $4,000 have been incurred but are not paid as of December 31, 2013.

Prepare adjusting journal entries for the year ended (date of) December 31, 2013, for each of these separate situations. Assume that prepaid expenses are initially recorded in asset accounts. Also assume that fees collected in advance of work are initially recorded as liabilities.
Assignment:

Ch 03 Ex 3-3

1.

award:
3 out of
3.00 points

Exercise 3-3 Adjusting and paying accrued wages LO C1, P1

Pablo Management has six part-time employees, each of whom earns $145 per day. They are normally paid on Fridays for work completed Monday through Friday of the same week. They were paid in full on Friday, December 28, 2013. The next week, the six employees worked only four days because New Year’s Day was an unpaid holiday.

a.

Prepare the adjusting entry that would be recorded on Monday, December 31, 2013.

b.

Prepare the journal entry that would be made to record payment of the employees’ wages on Friday, January 4, 2014.

Assignment:

Ch 03 Ex 3-5

1.

award:
2 out of
2.00 points

Exercise 3-5 Determining cost flows through accounts C1 A1

Determine the missing amounts in each of these four separate situationsathroughd.

Assignment:

Ch 03 Ex 3-7

1.

award:
5 out of
5.00 points

Exercise 3-7 Computing and interpreting profit margin LO A2

Use the following information to compute profit margin for each separate companyathroughe.(Round your answers to 1 decimal place.)

Which of the five companies is the most profitable according to the profit margin ratio?

Assignment:

Ch 03 Ex 3-11

1.

award:
12 out of
12.00 points

Exercise 3-11 Preparing the financial statements LO C3,P3

The following is the adjusted trial balance of Wilson Trucking Company.

Account Title

Debit

Credit

Cash

$

5,200

Accounts receivable

17,500

Office supplies

3,000

Trucks

161,000

Accumulated depreciation—Trucks

$

33,166

Land

85,000

Accounts payable

9,200

Interest payable

4,000

Long-term notes payable

53,000

Common Stock

24,000

Retained earnings

147,494

Dividends

20,000

Trucking fees earned

118,500

Depreciation expense—Trucks

21,392

Salaries expense

55,577

Office supplies expense

10,500

Repairs expense—Trucks

10,191

Totals

$

389,360

$

389,360

Retained Earnings is $147,494 at December 31, 2012.

1.

Prepare the income statement for the year ended December 31, 2013.

2.

Prepare the statement of retained earnings for the year ended December 31, 2013.

Assignment:

Ch 03 Ex 3-12

1.

award:
19 out of
19.00 points

Exercise 3-12 Preparing a classified balance sheet LO C4

Account Title

Debit

Credit

Cash

$

7,100

Accounts receivable

14,500

Office supplies

8,140

Trucks

154,000

Accumulated depreciation—Trucks

$

31,724

Land

41,000

Accounts payable

11,100

Interest payable

8,000

Long-term notes payable

66,000

Common stock

23,000

Retained earnings

94,518

Dividends

12,000

Trucking fees earned

123,000

Depreciation expense—Trucks

20,462

Salaries expense

69,412

Office supplies expense

18,000

Repairs expense—Trucks

12,728

Totals

$

357,342

$

357,342

Use the above adjusted trial balance to prepare Wilson Trucking Company’s classified balance sheet as of December 31, 2013.

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