Question

ssessing Financial Statement Effects of Transactions and Adjustments
Selected accounts of Portage Properties, a real estate management firm, are shown below as of January 31, before any accounts have been adjusted.

	Debits	Credits
Prepaid Insurance	$3,240
Supplies	1,540
Office Equipment	6,240
Unearned Rent Revenue		$5,550
Salaries Expense	2,325
Rent Revenue		13,250

Portage Properties prepares monthly financial statements. Using the following information, adjust the accounts as necessary on January 31 using the financial statements effect template.
(a) Prepaid insurance represents a two-year premium paid on January 1.
(b) Supplies of $710 were still available on January 31.
(c) Office equipment is expected to last eight years (or 96 months).
(d) Earlier this month, on January 1, Portage collected $5,550 for six months' rent in advance from a tenant renting space for $925 per month.
(e) Salaries of $490 have been earned by employees but yet not recorded as of January 31.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
(a)	Answer		Answer		Answer		Answer		Answer
(b)	Answer		Answer		Answer		Answer		Answer
(c)	Answer		Answer		Answer		Answer		Answer
(d)	Answer		Answer		Answer		Answer		Answer
(e)	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
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Answer		Answer		Answer Incorrect Mark 0.00 out of 1.00
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Answer 1

Balance Sheet Cash Contributed Noncash Earned Transaction Asset $ $ $ $ $ Liabilities Сapital Capital $(135.00) $(830.00) Assets + + + $(135.00) $(830.00) $(65.00) $ $ $ $(925.00) 490.00 (a) + + + (b) + + + (c) (65.00) + + (d) 925.00 + + + $ $(490.00) (e) + + + $ Income Statement Revenue Expenses $135.00 $830.00 Net Income (135.00) $ $ (830.00) $ $ $ $ 925.00 (65.00) 65.00 $ $ $490.00 925.00 $ (490.00) $ $ Notes a) Prepaid insurance is of 24 Months Monthly Insurance will be $135 So For jan 1 it should be reduced Because Expense will be recognized. b) Supplies of $710 still available Therefore, $1540-$710 $830 will be recog as Expense C) Depreciation expense - 6250/96 months $65 per month will be recognized. D) Rent per month $925 will be recognized e) So $490 expense will be recognized. +A A LA- LA A- +A + +A