ACCOUNTING CHAPTER 3
SOLUTIONS QUESTION WITH
VERIFED ANSWERS LATEST
UPDATE 2024/2025!!
E3-10 The income statement of Midland Co. for the month of July
shows net income of $1,500 based on Service Revenue $5,500, Salaries
and Wages Expense $2,300, Supplies Expense $1,200, and Utilities
Expense $500. ANSWER In reviewing the statement, you discover the
following
1. Insurance expired during July of $400 was omitted. ANSWER
Insurance expense 400
2. Supplies expense includes $300 of supplies that are still on hand at
July 31. ANSWER Supplies expense ($1,200 - $300) 900
3. Depreciation on equipment of $150 was omitted. ANSWER
Depreciation expense 150
4. Accrued but unpaid salaries and wages at July 31 of $280 were not
included. ANSWER Salaries and wages expense ($2,300 + $280)
$2,580
, 5. Services performed but unrecorded totaled $920. ANSWER Service
revenue ($5,500 + $920)
E3-8 Kaya Abbas, D.D.S., opened a dental practice on January 1, 2014.
ANSWER During the first month of operations, the following
transactions occurred.
1. Performed services for patients who had dental plan insurance. At
January 31, 875 of such services were performed but not yet recorded.
ANSWER Jan. 31 Accounts Receivable 875
Service Revenue 875
2. Utility expenses incurred but not paid prior to January 31 totaled 520.
ANSWER 31 Utilities Expense 520
Accounts Payable 520
3. Purchased dental equipment on January 1 for 80,000, paying 20,000
in cash and signing a 60,000, 3-year note payable. The equipment
depreciates 400 per month. ANSWER 31 Depreciation Expense 400
Accumulated Depreciation—Equipment400
Interest is 500 per month. ANSWER 31 Interest Expense 500
Interest Payable 500
Purchased a six-month malpractice insurance policy on January 1 for
18000 ANSWER 31 Insurance Expense ($18,000 ÷ 6) 3,000
SOLUTIONS QUESTION WITH
VERIFED ANSWERS LATEST
UPDATE 2024/2025!!
E3-10 The income statement of Midland Co. for the month of July
shows net income of $1,500 based on Service Revenue $5,500, Salaries
and Wages Expense $2,300, Supplies Expense $1,200, and Utilities
Expense $500. ANSWER In reviewing the statement, you discover the
following
1. Insurance expired during July of $400 was omitted. ANSWER
Insurance expense 400
2. Supplies expense includes $300 of supplies that are still on hand at
July 31. ANSWER Supplies expense ($1,200 - $300) 900
3. Depreciation on equipment of $150 was omitted. ANSWER
Depreciation expense 150
4. Accrued but unpaid salaries and wages at July 31 of $280 were not
included. ANSWER Salaries and wages expense ($2,300 + $280)
$2,580
, 5. Services performed but unrecorded totaled $920. ANSWER Service
revenue ($5,500 + $920)
E3-8 Kaya Abbas, D.D.S., opened a dental practice on January 1, 2014.
ANSWER During the first month of operations, the following
transactions occurred.
1. Performed services for patients who had dental plan insurance. At
January 31, 875 of such services were performed but not yet recorded.
ANSWER Jan. 31 Accounts Receivable 875
Service Revenue 875
2. Utility expenses incurred but not paid prior to January 31 totaled 520.
ANSWER 31 Utilities Expense 520
Accounts Payable 520
3. Purchased dental equipment on January 1 for 80,000, paying 20,000
in cash and signing a 60,000, 3-year note payable. The equipment
depreciates 400 per month. ANSWER 31 Depreciation Expense 400
Accumulated Depreciation—Equipment400
Interest is 500 per month. ANSWER 31 Interest Expense 500
Interest Payable 500
Purchased a six-month malpractice insurance policy on January 1 for
18000 ANSWER 31 Insurance Expense ($18,000 ÷ 6) 3,000
