| Reinforcement Problems, continued | ||
| LG 4-2, 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 |
Note: You could also see this as a portion of 3/12. | ||||||||||||||||||||||||||||||
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 | By
interpreting the purchased semiannually information, the amounts used
up are: Note: You could also see this as a portion of 2/12. | ||||||||||||||||||||||||||||||
| S2 | Section
I · Adjusting the Accounts | |
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