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E3.4 (LO 1, 2, 3) Luong Corporation encounters the following situations: 1. Luong collects $1,300 from a customer in 2020 for services to be performed in 2021. 2. Luong incurs utility expense which is not yet paid in cash or recorded. 3. Luong's employees worked 3 days in 2020 but will not be paid until 2021. 4. Luong performs services for customers but has not yet received cash or recorded the transaction. 5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1. 6. Luong received cash for future services and recorded a liability until the service was performed. 7. Luong performed consulting services for a client in December 2020. On December 31, it had no billed the client for services provided of $1,200. 8. Luong paid cash for an expense and recorded an asset until the item was used up. 9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies remain unused. 10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years. 11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable. Instructions Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020.

E3.4 (LO 1, 2, 3) Luong Corporation encounters the following situations: 1. Luong collects $1,300 from a customer in 2020 for services to be performed in 2021. 2. Luong incurs utility expense which is not yet paid in cash or recorded. 3. Luong's employees worked 3 days in 2020 but will not be paid until 2021. 4. Luong performs services for customers but has not yet received cash or recorded the transaction. 5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1. 6. Luong received cash for future services and recorded a liability until the service was performed. 7. Luong performed consulting services for a client in December 2020. On December 31, it had no billed the client for services provided of $1,200. 8. Luong paid cash for an expense and recorded an asset until the item was used up. 9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies remain unused. 10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years. 11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable. Instructions Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020.

Individual Income Taxes
Individual Income Taxes
43rd Edition
ISBN:9780357109731
Author:Hoffman
Publisher:Hoffman
Chapter20: Corporations And Partnerships
Section: Chapter Questions
Problem 14DQ
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E3.4

E3.4 (LO 1, 2, 3) Luong Corporation encounters the following situations: 1. Luong collects $1,300 from a customer in 2020 for services to be performed in 2021. 2. Luong incurs utility expense which is not yet paid in cash or recorded. 3. Luong's employees worked 3 days in 2020 but will not be paid until 2021. 4. Luong performs services for customers but has not yet received cash or recorded the transaction. 5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1. 6. Luong received cash for future services and recorded a liability until the service was performed. 7. Luong performed consulting services for a client in December 2020. On December 31, it had not billed the client for services provided of $1,200. 8. Luong paid cash for an expense and recorded an asset until the item was used up. 9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies remain unused. 10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years. 11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable. Instructions Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020.
Transcribed Image Text:E3.4 (LO 1, 2, 3) Luong Corporation encounters the following situations: 1. Luong collects $1,300 from a customer in 2020 for services to be performed in 2021. 2. Luong incurs utility expense which is not yet paid in cash or recorded. 3. Luong's employees worked 3 days in 2020 but will not be paid until 2021. 4. Luong performs services for customers but has not yet received cash or recorded the transaction. 5. Luong paid $2,800 rent on December 1 for the 4 months starting December 1. 6. Luong received cash for future services and recorded a liability until the service was performed. 7. Luong performed consulting services for a client in December 2020. On December 31, it had not billed the client for services provided of $1,200. 8. Luong paid cash for an expense and recorded an asset until the item was used up. 9. Luong purchased $900 of supplies in 2020; at year-end, $400 of supplies remain unused. 10. Luong purchased equipment on January 1, 2020; the equipment will be used for 5 years. 11. Luong borrowed $12,000 on October 1, 2020, signing an 8% one-year note payable. Instructions Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, or accrued revenue) is needed in each situation at December 31, 2020.
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