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Chapter 3: Q3TI (page 140)

Startech Surveillance Services had the following adjustments as of the end of the year:

a. Equipment depreciation was \(1,500.

b. \)700 of advertising expense was incurred but not paid. (Use Advertising Payable.)

c. Office Supplies on hand at the end of the year totaled \(250. The beginning balance of Office Supplies was \)600.

d. \(1,200 of rent revenue was earned but not recorded or received.

e. Unearned revenue of \)3,000 had been earned.

6. For each situation, indicate which category of adjustment (deferral or accrual) is described.

7. Journalize the adjusting entry needed.

Short Answer

Expert verified

Equipment depreciation and office supplies are deferral and the rest are Accrual.

Step by step solution

01

Classification of adjustment type

Transaction

Adjustment type

a)

Deferred expense

b)

Accrued expense

c)

Deferred expense

d)

Accrued revenue

e)

Accrued revenue

02

Recording of journal entry

Date

Particular

Debit

Credit

a)

Depreciation expense – Equipment

$ 900

Accumulated depreciation - Equipment

$ 900

Being depreciation incurred

b)

Advertising Expense

700

Accrued Expense

700

Being office supplies used

c)

Supplies expense

350

Office Supplies

350

Being supplies expense incurred

d)

Accounts receivables

1,200

Net revenue

1,200

Being revenue earned but not received

e)

Unearned revenue

$3,000

Service revenue

$3,000

Being unearned revenue earned

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Most popular questions from this chapter

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Question :The worksheet of Best Jobs Employment Service follows but is incomplete.The following data at April 30, 2018, are given for Best Jobs Employment Service: a. Service revenue accrued, \(700. b. Office supplies used, \)300. c. Depreciation on equipment, \(1,300. d. Salaries owed to employees, \)1,400. Requirements 1. Calculate and enter the adjustment amounts directly in the Adjustments columns. Use letters a through d to label the four adjustments. 2. Calculate and enter the adjusted account balances in the Adjusted Trial Balance columns. 3. Prepare each adjusting journal entry calculated in Requirement 1. Date the entries, and include explanations
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