| Reinforcement Problems, continued | ||
| LG 4-1, continued |
| Information Example | The
key information type is . . . | To determine the cost used up, you need to . . . | ||||||||||||||||||||||||||||||
|
Combination:
cost used up and cost per unit was bought last year, so it will be completely used up in this year. the Oct. 1 payment have been used up. |
policy expense per month. Note:
You could | ||||||||||||||||||||||||||||||
8. At the beginning of the year, the Prepaid Rent account had a balance of $1,300, and during the year $10,700 of additional prepayments were made. The amount of Prepaid Rent in force at year end is $3,000. |
The
asset cost remaining |
Subtract the asset cost remaining from the unadjusted balance of the Prepaid Expense account. | ||||||||||||||||||||||||||||||
9. At year end, the Prepaid Rent account balance shows as $12,000. 75% of this balance expired during the year. The remaining 25% will be used next year. |
The
asset cost used up |
Determine
portion (75%) used up. |
||||||||||||||||||||||||||||||
10. The June 30 trial balance of Waukesha Company shows prepaid interest of $5,000 for money borrowed on June 1. Interest expense is incurred at $1,500 per month. No interest expense has been recorded. |
The
cost per unit of the asset (units of time) |
Use the cost per unit of the asset. ($1,500 per month is already calculated for you.) | ||||||||||||||||||||||||||||||
|
Combination:
cost used up and cost per unit prepayments from Jan. 1 and May 1 are fully used up by December 31. (month) of Nov. 1 prepayment |
By
interpreting the purchased semiannually information,
the amounts used up are: Note:
You could also see | ||||||||||||||||||||||||||||||
| S2 | Section
I · Adjusting the Accounts | |
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