Book 2 - Chapter 9

Reinforcement Problems
LG 9-1.

Situation	Adjusting for what?	Adjusting entry at end of period
a. On May 1, Holyoke Company paid $12,000 for a three- year insurance policy. Holyoke Company has a June 30 year end.	prepaid expense	Dr. Insurance Expense Cr. Prepaid Insurance
b. In November, Middlesex Company earned one-fourth of the amount that had been advanced by a customer in September.	unearned revenue	Dr. Unearned Revenue Cr. Revenue
c. An inventory count shows $520 of office supplies on hand at year end. The beginning balance was $1,000.	prepaid expense	Dr. Supplies Expense Cr. Supplies
d. Cape Cod Enterprises performed $7,000 of services for customers during December that remained unrecognized at year end.	accrued expense	Dr. Accounts Receivable Cr. Revenue
e. Burdett Enterprises shows $15,000 of Office Equipment and $105,000 of Automotive Equipment on the balance sheet.	depreciation expense	Dr. Depreciation Expense Cr. Accumulated Depreciation
f. This year, Massasoit Company paid for 18 months of magazine subscriptions, and at year end seven months’ worth is still in force.	prepaid expense	Dr. Subscription Expense Cr. Prepaid Subscriptions
g. Kinyon Company records show utility expenses unrecorded and unpaid of $350.	prepaid expense	Dr. Utility Expense Cr. Accounts Payable
h. Campbell Corporation paid a utility bill that was owing in the amount of $240.	Not an adjusting entry. This is a payment of a previously accrued expense.
i. In June, Springfield Company completed negotiations, signed a contract, and received $25,000 in advance. By year end, the company had performed $5,500 of services on the contract.	unearned revenue	Dr. Unearned Revenue Cr. Revenue
j. North Shore Inc. has a six-day workweek and pays employees weekly, each Saturday. June 30, year end, is on a Tuesday.	accrued expense	Dr. Wages Expense Cr. Wages Payable
k. Bristol Enterprises signed a contract to perform $30,000 of future services.	No entry required. Just signing a contract does not affect the accounting equation.
l. The Supplies account of Northern Essex Enterprises shows a beginning balance of $700 and purchases of $1,200. The ending inventory shows $150 still unused.	prepaid expense	Dr. Supplies Expense Cr. Supplies
m. Three Rivers Corporation received a $50,000 advance from a customer for 2,500 switching devices, all at the same fixed price. By year end, 520 of the switches had been shipped.	unearned revenue	Dr. Unearned Revenue Cr. Revenue

Learning Goal 9, continued

SOLUTIONS

Learning Goal 9: Know Which Adjustment You Need to Do

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