Following are several independent accounting situations: 1. Interest of $1,500 on a loan outstanding during 2012 is

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Question:

Following are several independent accounting situations:

1. Interest of $1,500 on a loan outstanding during 2012 is due on January 1, 2013.

2. Received $100,000 in 2012 for a service project that is 45% complete at year-end.

3. Received a $450 utility bill for the month of December on January 3, 2013.

4. $750 of prepaid rent for the month of December has expired.

5. $5,000 of revenue for services performed on December 14, 2012, is uncollected.

6. Prepay $6,500 of insurance on December 31, 2012, for the entire year of 2013.

7. Intend to buy a warehouse on January 1, 2013, for $125,000.

8. Equipment depreciation is $5,000 for the year.

Required

For each independent situation, determine the basic type of adjustment, if any, that is needed on December 31, 2012 (deferred revenue, deferred expense, accrued revenue, accrued expense). What would be the cumulative effect on 2012 net income of all adjustments made in situations 1–8?