ACC 290 Week 4 Apply Connect Exercise (2019 New)

Review the Knowledge Check in preparation for this assignment.

Complete the Week 4 Exercise in Connect.

Note: You have only one attempt available to complete this assignment.

Grades must be transferred manually to eCampus by your instructor. Don’t worry, this might happen after your due date.

1. On June 1, 2019, Cain Company, a new firm, paid $5,100 rent in advance for a six-month period. The $5,100 was debited to thePrepaid Rent
2. On June 1, 2019, the firm bought supplies for $7,200. The $7,200 was debited to the Supplies An inventory of supplies at the end of June showed that items costing $2,925 were on hand.
3. On June 1, 2019, the firm bought equipment costing $54,000. The equipment has an expected useful life of 10 years and no salvage value. The firm will use the straight-line method of depreciation.

1. A firm purchased a four-year insurance policy for $15,840 on July 1, 2019. The $15,840 was debited to the Prepaid Insurance
2. On December 1, 2019, a firm signed a contract with a local radio station for advertising that will extend over a three-year period. The firm paid $47,880 in advance and debited the amount to Prepaid Advertising.

On January 31, 2019, the general ledger of Palmer Company showed the following account balances.

Additional information:

800. Supplies used during January totaled $4,800.
801. Expired insurance totaled $1,600.
802. Depreciation expense for the month was $1,375.

Assume that a firm reports net income of $87,000 prior to making adjusting entries for the following items: expired rent, $6,700; depreciation expense, $7,900; and supplies used, $3,300.

Assume that the required adjusting entries have not been made. What effect do these errors have on the reported net income?

Desoto Company must make three adjusting entries on December 31, 2019.

1. Supplies used, $9,200 (supplies totaling $14,400 were purchased on December 1, 2019, and debited to the Suppliesaccount).
2. Expired insurance, $6,400; on December 1, 2019, the firm paid $38,400 for six months’ insurance coverage in advance and debitedPrepaid Insurancefor this amount.
3. Depreciation expense for equipment, $4,000.

A total of $4,150 in supplies was purchased during the year. At the end of the year $1,080 of the supplies were left. The adjusting entry needed at the end of the year is:

Multiple Choice

debit Supplies Expense $4,150; credit Supplies $4,150

debit Supplies Expense $3,070; credit Supplies $3,070

debit Supplies Expense $1,080; credit Supplies $1,080

debit Supplies $3,070; credit Supplies Expense $3,070

MacGyver Company bought equipment on January 3, 2019, for $34,700. At the time of purchase, the equipment was estimated to have a useful life of 5 years and a salvage value of $1,220. Using the straight-line method, the amount of one year’s depreciation is

Multiple Choice

$1,220

$5,783

$465

$6,696

Equipment costing $16,500 with an estimated salvage value of $1,140 and an estimated life of 4 years was purchased on October 31, 2019. Using the straight-line depreciation method, what is the amount of depreciation expense to be recorded at December 31, 2019?

Multiple Choice

$320

$3,840

$640

$1,140

On September 1, 2019, Jay Walker Company purchased a one-year insurance policy for $360. The correct adjusting entry on December 31, 2019, is:

Multiple Choice

debit Insurance Expense $120; credit Prepaid Insurance $120

debit Insurance Expense $270; credit Prepaid Insurance $270

debit Prepaid Insurance $30; credit Insurance Expense $30

debit Prepaid Insurance $360; credit Insurance Expense $360

On October 25, 2019, the company paid $36,000 rent in advance for the six-month period (November 2019 through April 2020). On December 31, 2019, the adjustment for expired rent would include:

Multiple Choice

a $12,000 debit to Rent Expense.

a $6,000 credit to Cash.

a $36,000 credit to Rent Expense.

a $6,000 credit to Prepaid Rent.