Exercise 3-4 (10 minutes) 1. E 4. D 2° C 5. A 3. =F 6. B Exercise 3-6 (25 minutes) a, Depreciation Expense—Equipment .. Accumulated Depreciation—Equipment Record depreciation expense for the year. 18,000 18,000 b, Insurance Expense .. Prepaid Insurance’ Record insurance coverage that expired (86,000 - $1,100). 4,900 4,900 c, Supplies Expense Supplies Record office supplies used ($700 + $3,480 - $300). 3,880 3,880 d. Unearned Revenue... Services Revenue Record earned portion of ($15,000 x 2/3). 10,000 10,000 e, Rent Expense Prepaid Rent Record rental coverag 5,800 5,800 Exercise 3-6—concluded f. Wages Expense. ‘Wages Payable Record wages accrued but not yet paid. 3,200 3,200 Notes: Prepaid Insurance” ‘Supplies™ Bal.Bal. 6,000 Beg. Bal. 700 Purch. 3,480 2 Used 2? Used End.Bal. 1,100 End. Bal. 300Exercise 3-13 (30 minutes) Depreciation Expense—Equipment .. Accumulated Depreci Record depreciation expense for the year. Insurance Expense .. Prepaid Insurance.. Record insurance coverage expired ($2,000 - $600). Unearned Revenue. Services Revenue ven Record earned portion of payment received in advance ($3,000 x 1/3). Wages Expense. Wages Payable. Record wages accrued but not yet paid. Interest Receivable. Interest Revenue Record interest incurred but not yet paid. 5,000 1,400 1,000 1,200 400 5,000 1,400 1,000 4,200 400Exercise 3-16 (20 minutes) STARK COMPANY Adjusted Trial Balance December 34 Depit Creait Cash . $10,000 Accounts receivabl 4,000 ‘Supplies ‘800 Prepaid insurance 2,500 Buildings. 40,000 Accumulated depreciation—Building $15,000 Accounts payab! 1,500 Interest payable. 100 Wages payable 400 Unearned revenue. 00 Notes payable 11,000 Stark, Capital 24,800 Stark, Withdrawals 3,000 Services revenue 20,000 Depreciation expense—Bulldings .. 2,000 Wages expense ......... . 7,500 Interest expense. 500 Insurance expense. 1,800 Supplies expense. ‘200 Utilities expense. Totals. “$73,600 Exercise 3-17 (25 minutes) ‘STARK COMPANY Income Statement For Year Ended December 31 Services revenue $20,000 Expenses Depreciation expense—Buildings $2,000 Wages expensé eveneenee 7,500 Interest expense 500 Insurance expense .. 1,800 Supplies expense 200 Utilities expense 4,300 Total expenses. 43,300 Net incomeExercise 3-17 (concluded) STARK COMPANY Statement of Owner's Equity For Year Ended December 31 Stark, Capital, Dec. 31 prior year $24,800 Add: Investments by owne! 0 Net income... 6,700 31,500 Less: Withdrawals by owner .. (3,000) Stark, Capital, Dec. 31 current year... $28,500 Exercise 3-17 (concluded) ‘STARK COMPANY Balance Sheet December 31 Assets Cash... $10,000 Accounts receivabl 4,000 Supplies. 800 Prepaid insurancs 2,500 Buildings ... $40,000 Accumulated depreciation-Buildings (15,000) 25.000 Total assets... 42,300 Liabilities Accounts payable... $ 1,500 Interest payable 100 Wages payable. 400 Unearned revenu 800 Notes payable . 411,000 Total liabilities. 13,800 Equity Stark, Capital 28.500 Total liabilities and equity. $42,300