Question

1. Aspen Co. began 2018 with Supplies of $1,000. Aspen purchased $7,400 of supplies during the year. A physical count at December 31 showed supplies on hand of $450. How much Supplies Expenses should be reported on the 2018 Income Statement? 2. Aspen’s 2018 Income Statement reflects Service Revenue = $12,000. Deferred Revenue on January 1 was $2,400 and $800 at December 31. How much cash was collected from customers in advance during 2018? 3. Aspen began 2018 with Prepaid Insurance of $1,500. Premiums paid during 2018 were $18,000. If $2,100 of insurance was still in force at December 31, how much Insurance Expense should be reported on the 2018 Income Statement? 4. Aspen reported Salary Expense of $ 103,400 on its 2018 Income Statement. Beginning Salary Payable was $4,200 and Ending Salary Payable was $7,600. How much cash was paid for salaries during 2018?

Answer 1

Ans 1 Supplies expense = Beginning Supplies + Purchases - Ending Supplies Supplies expense = $1000+$ 7400-$450 Supplies expense = $7,950 Supplies expense reported in Income Statement is $7950 Ans 2 Service Revenue = Beginning Deferred Revenue + Advance Collected - Ending Deferred Revenue Advance Collected = Service Revenue + Ending Deferred Revenue - Beginning Deferred Revenue Advance Collected = $12000+$800-$2400 Advance Collected = $10,400 Ans 3 Insurance Expense = Beginning Prepaid Insurance + Insurance Paid - Ending Prepaid Insurance Insurance Expense = $1500+$18000-$2100 Insurance Expense = $17,400 Ans 4 Beginnin Salary Payable + Salary Expense - Cash Paid = Ending Salary Payable Cash Paid = Beginning Salary Payable + Salary Expense - Ending Salary Payable Cash Paid = $4200+$103400-$7600 Cash Paid = $1,00,000 Ans 5 Beginning AR + Sales Revenue - Write Off-Colllection = Ending AR Sales Revenue = Ending AR -Beginning AR +Write off + Collection Sales Revenue = $17900-$22500+$6000+$150000 Sales Revenue = $1,51,400