Concept explainers
Exercise 4.9
LO 2, 6, 7
Record transactions and adjustments Prepare an answer sheet with the column headings shown after the following list of transactions. Record the effect, if any, of the transaction
(Note: As an alternative to using the columns, you may write the
- During the month, the Supplies (asset) account was debited $3,600 for supplies purchased. The cost of supplies used during the month was $2,800. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month.
- An insurance premium of $960 was paid for the coming year. Prepaid Insurance was debited.
- Wages of $6,400 were paid for the current month.
- Interest income of $500 was received for the current month.
- Accrued $1,400 of commissions payable to sales staff for the current month.
- Accrued $260 of interest expense at the end of the month.
- Received $4,200 on accounts receivable accrued at the end of the prior month.
- Purchased $1,200 of merchandise inventory from a supplier on account.
- Paid $320 of interest expense for the month.
- Accrued $ 1,600 of wages at the end of the current month.
- Paid $1,000 of accounts payable.
Transaction/Adjustment | Assets Liabilities | Stockholders’Equity | NetIncome |
a. | Supplies |
-2,800
-2,800
(Note: An increase to Supplies Expense decreases Net Income.)
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Accounting: What the Numbers Mean
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