E3-3B Lagasse Corporation encounters the following situations: 1. Lagasse purcha
ID: 2367128 • Letter: E
Question
E3-3B Lagasse Corporation encounters the following situations:
1. Lagasse purchased $1,400 of supplies in 2008; at year-end, $500 of supplies remains unused.
2. Lagasse incurs utility expense which is not yet paid in cash or recorded.$1000
3. Lagasse’s employees worked 3 days in 2008, but will not be paid until 2009. $ 200
4. Lagasse earned service revenue but has not yet received cash or recorded the transaction.$ 5000
5. Lagasse received cash for future services to be performed in 2009.worth $50000, $10000 was earned
6. Lagasse paid $8,000 rent on October 1 for the 4 months starting October 1.
7. Lagasse performed consulting services for a client in December 2008. On December 31, it billed the client $3,300.
8. Lagasse paid cash for an expense and recorded an asset until the item was used up. ( 400)
9. Lagasse collects $2,000 from a customer for services to be performed next year.$ 1000 was earned.
10. Lagasse purchased equipment on January 1, 2008; the equipment will be used for 5 years. ( 600 was used)
11. Lagasse borrowed $20,000 on October 1, 2008, signing a 10% one-year note payable.
Instructions
Identify what type of adjusting entry (prepaid expense, unearned revenue, accrued expense, and accrued revenue) is needed in each situation, at December 31, 2008.
Explanation / Answer
prepaid expense, unearned revenue, accrued expense, and accrued revenue 1. Prepaid expense 2. accrued expense 3. accrued expense 4. accrued revenue 5. unearned revenue 6. Prepaid expense 7. unearned revenue 8. accrued revenue 9. unearned revenue 10. prepaid expense 11. accrued expense Don't forget to rate!
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