Submitted by: Submitted by shawnamkeehn
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Words: 301
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Category: Business and Industry
Date Submitted: 04/25/2011 07:44 PM
Checkpoint: Adjustments and accrual and cash basis accounting
3-1
a. Unearned revenues
B. accrued expenses
C. accrued expenses
D. accrued revenue
E. prepaid expenses
3-9
Harden Co. earned $39,000 in revenues and received $33,000 cash from their customers. The company incurred expenses of $22,500 but did not pay $2,250 at the end of the year. Harden prepaid $3,750 cash for the expenses that would incur the next year. Calculate the first year net income under both the cash basis and accrual basis of accounting.
C ash received from customer $33,000
Less expenses paid in cash (22,500+2,250+3, 750,) 28,500
Net income
Net income under the cash basis
Revenues earned $39,000
Less expenses accrued (22,500, 2,250)20,000
Net income $19,000
3-1
a. Record this period’s depreciation expense
b. Record accrued salaries expense
c. Record period’s use of prepaid expenses
d. Record accrued interest revenues
e. Record accrued interest expenses
f. Record of previously unearned income
Salaries expense 13,280
Salaries payable 13,280
Answer is B
Interest expense 2,208
Interest payable 2,208
Answer is E
Insurance expense 3,180
Prepaid insurance 3,180
Answer is C
Unearned...