Homework Week 3 Chapter 03 problems HW Score 218 score 009

Homework: Week 3 - Chapter 03 problems HW Score: 21.8 score: 0.09 or 1 pt 2of5 (2complete P3-34A (similar to) Wilson Fishing Charters has collected the following data for the December 31 adjusting entries (Click the icon to view the data) Read the reauirements Requirement 1. Journalize the adustng entries needed on December 31 for Wilson Fishing Charters. Assume Wilison records adjusting entries only at t Record debits first, then credits. Select the explanation on the last line of the journal entry table) a. The company received ts electric bill on December 20 for $375 but will not pay it unti January 5 Use the Ullities Payable account) Credit Debit Date Accounts and Explanation 375 (a) Dec: 31Utsities Expense 375 Utilities Payable To accrue utilities expense b. wison purchased a nine-month boat insurance policy on November 1 for $1.800. Wilson recorded a debit to Prepaid Insurance. Debit Credit Date Accounts and Explanation b) Dec 31

Solution

1)

Sl no.

Accounts Title and Explanation

Debit

Credit

Dec 31

a)

Utilities Expense

375

   Utilities Payable

375

(Being utilities expense payable)

b)

Insurance Expense

400

    Prepaid Insurance

400

(Being insurance expense recorded, (1800/9)*2

c)

Account Receivable

1500

      Service Revenue

1500

(Being Service revenue recorded)

d)

Depreciation Expense

14000

     Accumulated Depreciation

14000

(Being Depreciation as per straight line method = (Cost of asset – Residual value)/useful life of asset. (73000-3000)/5=14000

e)

Unearned Revenue

3000

    Service Revenue

3000

(Being charter completed and revenue recorded)

2)

Sl no.

Accounts Title

Category of accounts Affected

Overstated/Understated

a)

Utilities Expense

Profit and loss account

Overstated

Utilities Payable

Current Liability

Understated

b)

Insurance Expense

Profit and loss account

Overstated

Prepaid Insurance

Current Asset

Overstated

c)

Account Receivable

Current Asset

Understated

Service Revenue

Profit and loss account

Understated

d)

Depreciation Expense

Profit and loss account

Overstated

Accumulated Depreciation

Contra asset account

Understated

e)

Unearned Revenue

Current Liability

Overstated

Service Revenue

Profit and loss account

Understated

Sl no.	Accounts Title and Explanation	Debit	Credit
Dec 31
a)	Utilities Expense	375
	Utilities Payable		375
	(Being utilities expense payable)
b)	Insurance Expense	400
	Prepaid Insurance		400
	(Being insurance expense recorded, (1800/9)*2
c)	Account Receivable	1500
	Service Revenue		1500
	(Being Service revenue recorded)
d)	Depreciation Expense	14000
	Accumulated Depreciation		14000
	(Being Depreciation as per straight line method = (Cost of asset – Residual value)/useful life of asset. (73000-3000)/5=14000
e)	Unearned Revenue	3000
	Service Revenue		3000
	(Being charter completed and revenue recorded)