Question

ertomheducation.com Connect Cengage Digital Learning Search results and morningside Moringside 210-PO 4 Graded Homework H Show the effect, if any, of the transaction entry or adjusting entry on the appropriate balance sheet category or on the income statement by selecting the amount and indicating whether it is an addition (4) or a subtraction () Column headings reflect the expanded balance sheet equation items that affect net income should not be shown as affecting stockholders' equity. In some cases, only one column may be affected because all of the specific accounts affected by the transaction are included in that category Transaction a has been completed as an illustration a. Provided services to a client on account, revenues totaled $560 b. Paid an insurance premium of $480 for the coming year. An asset. Prepaid Insurance, was debited. c. Recognized Insurance expense for one month from the premium transaction in b via a reclassification adjusting entry d. Paid $700 of wages accrued at the end of the prior month e. Paid $2,650 of wages for the current month. t Accrued $700 of wages at the end of the current month. g. Received cash of $1,575 on accounts receivable accrued at the end of the prior month Required: a. Indicate the financial statement effect. b. Prepare the journal entry for the above transactions Complete this question by entering your answers in the tabs below. Required A Required B Indicate the financial statement effect. Income Statement Balance Sheet Category Liabilities Transaction! Adjustment Assets Stockholders' Equity Net Income Effect +560 b C < Prev 5 of 12 13 Next >

Answer 1

	Balance Sheet Category						Income Statement
Transaction/ Adjustment	Assets	=	Liabilities	+	Stockholders' Equity		Net Income Effect
a.	+ $ 560	=		+			+ $ 560
b.	+ $ 480 and - $ 480	=		+
c.	($ 40) ( $ 480 / 12 )	=		+			($ 40)
d.	($ 700 )	=	($ 700 )	+
e.	($ 2,650 )	=		+			($ 2,650 )
f.		=	+$ 700	+			($ 700)
g.	+ $ 1,575 and - $ 1,575
Event	General Journal	Debit	Credit
a.	Account receivable	$ 560
	Service revenue		$ 560
	(To record the service provided)
b.	Prepaid insurance	$ 480
	Cash		$ 480
	(To record insurance premium in advance)
c.	Insurance Expense ( $ 480 / 12)	$ 40
	Prepaid Insurance		$ 40
	(To record the recognized insurance expense )
d.	Wages payable	$ 700
	Cash		$ 700
	(To record the wages accrued )
e.	Wages expense	$ 2,650
	Cash		$ 2,650
	(To record wages paid)
f.	Wages expense	$ 700
	Wages payable		$ 700
	(To record the wages accrued)
g.	Cash	$ 1,575
	Account receivable		$ 1,575
	(To record cash received on accounts )