Question

In: Accounting

X Company’s financial records showed the following during 2015: Payments made for office supplies        $  60,000               

  1. X Company’s financial records showed the following during 2015:

Payments made for office supplies        $  60,000                   Insurance premiums receipts                                    $500,000

Office rental revenues                               $425,000                  Wages & salaries expense                        $130,000

X follows the accrual basis of accounting.  The following were taken from X’s balance sheets:

                                                                       12-31-15                    12-31-14

Office rental receivables                           $39,000                     $40,000

Insurance premiums receivables              40,000                       33,000

Prepaid office supplies                                17,000                      11,000

Prepaid insurance expense                          9,000                         4,000

Wages & salaries payable                           18,000                       21,000

Office supplies payable                                 8,000                      10,000

Unearned insurance premiums                 22,000                       19,000

Unearned office rental revenue                  3,000                      12,000

  1. What was office supplies expense during 2015?

60,000-6,000+2,000= 56,000

  1. What were wages & salaries payments during 2015?

130,000+3,000= 133,000

  1. What were insurance premiums revenues during 2015?

500,000-3,000+7,000=510,000

  1. What were office rental receipts during 2015?

425,000+1,000-9,000=417,000

kindly verify my answers and help with corrections

Solutions

Expert Solution

a.

Office supplies expense = Payment made for office supplies + Prepaid office supplies, beginning - Prepaid office supplies, ending- Office supplies payable, beginning + Office supplies payable, ending

= 60,000+11,000-17,000-10,000+8,000

= $52,000

b.

Wages and salaries payments =   Wages and salaries expenses + Wages and salaries payable, beginning - Wages and salaries payable, ending

= 130,000+21,000-18,000

= $133,000

c.

Insurance premium revenue = Insurance premium receipts + Insurance premium receivable, ending - Insurance premium receivable, beginning - Unearned insurance premium, ending + Unearned insurance premium, beginning

= 500,000+40,000-33,000-22,000+19,000

= $504,000

d.

Office rental receipts = Office rental revenue + Office rental receivable, beginning - Office rental receivable, ending + Unearned office rental revenue, ending - Unearned office rental revenue, beginning

= 425,000+40,000-39,000+3,000-12,000

= $417,000

Kindly comment if you need further assistance. Thanks

ekkarill92 answered 2 years ago
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