Saint Peter\'s University Department of Accountancy Professor Robert F. Koch Ans

Question

Saint Peter's University Department of Accountancy Professor Robert F. Koch Answer all of the questions on your own paper. Be sure to print your name on all pages of your answers. Number you answers to match the corresponding question and subheadings. Number your answers sequentially, do not mix the order. Submit all pages of your test for grading. OBJ, 1 PE 3-1B Accounts requiring adjustment Indicate with a Yes or No whether or not each of the following accounts normally re- quires an adjusting entry. e. Nathan Archer, Capital c. Interest Expense a. Building d. Miscellaneous Expense f. Prepaid Insurance b. Cash OBJ. 1 PE 3-2B Type of adjustment Classify the following items as (1) prepaid expense, (2) unearned revenue, (3) accrued revenue, or (4) accrued expense. a. Cash received for use of land next month c. Rent expense owed but not yet paid d. supplies on hand b. Fees earned but not received OBJ, 2 PE 3-3B Adjustment for prepaid expense The prepaid insurance account had a beginning balance of $9,600 and was debited for $12,900 premiums d during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of unexpired insurance related to future periods is $7,360 PE 3-4B Adjustment for unearned revenue OBJ, 2 On June 1, 2014, Herbal Co. received $18,900 for the rent of land for 12 months. Journal- ize the adjusting entry required for unearned rent on December 31, 2014. PE 3-5B Adjustment for accrued revenues OBJ.2 At the end of the current year, $17,555 of fees have been earned but have not been billed to clients. Journalize the adjusting entry to record the accrued fees.

Explanation / Answer

PE 3-1B a. Building - Yes b. Cash - Yes c. Interest Expense - No d. Miscellaneous Expense - No e. Nathan Archer, Capital - Yes f. Prepaid Insurance - Yes PE3 - 2B a. Cash received for use of land next month - Unearned Revenue b. Fees earned but not received - Accrued Revenue c. Rent expense owed but not yet paid - Accrued Expense d. Supplies on Hand - Prepaid Expense PE3 - 3B Journal entry at the end of the year Insurance A/c DR $ 15,140 To Prepaid Insurance A/c $ 15,140 Amount debited to Insurance = Opening Prepaid Balance + Premiums Debited - Closing Prepaid Balance PE3 - 4B Journal Entry for Unearned Rent Rent A/c DR $ 7,875 To Unearned Rent A/c $ 7,875 (Rent is unearned for five months from January 1, 2015 to May 31, 2015) PE3 - 5B Journal Entry for Accrued Fees Accrued Fees Receivable A/c DR $ 17,555 To Fees Income A/c $ 17,555

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