Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)
5th Edition
ISBN: 9780134833170
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 51BP
Effects of adjusting
Fischer Remodeling, Inc., completed the following selected transactions and prepared these
Aug | 1 | Prepaid insurance for August through October, $3,000. |
3 | Performed service on account, $3,150. | |
6 | Purchased office furniture on account, $1,400. | |
6 | Paid property tax expense, $975. | |
12 | Purchased office equipment for cash, $1,950. | |
18 | Performed services and received cash. $2,800. | |
23 | Collected $925 on account. | |
26 | Paid the account payable from the August 6 transaction. | |
30 | Paid salaries expense, $1,350. | |
31 | Recorded an adjusting entry for August insurance expense related to the August 1 transaction. | |
31 | Recorded an adjusting entry for unearned revenue now earned, $650. |
Requirements
- 1. State whether each transaction would increase revenues, decrease revenues, increase expenses, decrease expenses, or have no effect on revenues or expenses. If revenues or expenses are affected, give the amount of the impact on revenues or expenses for August. Use the following format for your answer.
Revenues and Expenses for August | ||
Date | Impact on Revenues or Expenses | $ Effect on Revenues or Expenses |
Aug XX | Increase Revenues | $XXX |
- 2. Compute August net income or net loss under the accrual basis of accounting.
- 3. State why accrual accounting results in an accurate measurement of income.
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Chapter 3 Solutions
Financial Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (5th Edition)
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