Chapter 3 Hand-out Assignment 26 points Question 1 - 9 points One part of an adjusting entry is given below. 1. Unearned Revenue is debited. 2. Prepaid Rent is credited. 3. Accounts Receivable is debited. 4. Depreciation Expense is debited. 5. Utilities Expense is debited. 6. Interest Payable is credited. 7. Service Revenue is credited (give two possible debit accounts). 8. Interest Receivable is debited. Instructions Indicate the account title for the other part of the entry. $35,000 Question 2 17 marks PIERSON INSURANCE AGENCY Income Statement Month Ended June 30 Revenues Premium commission revenues ............ Expenses Salary expense.. Advertising expense..................... Rent expense.. Depreciation expense......... Total expenses. Profit... $6,000 800 4,200 2.800 13.800 $21,200 Additional data: When the income statement was prepared, the company accountant neglected to take into consideration the following information: 1. A utility bill for $2,000 was received on the last day of the month for electric and gas service for the month of June. 2. A company insurance salesman sold a life insurance policy to a client for a premium of $28,000. The agency billed the client for the policy and is entitled to a commission of 20%. 3. Supplies on hand at the beginning of the month were $3,000. The agency purchased additional supplies during the month for $2,500 in cash and $2,200 of supplies were on hand at June 30. 4. The agency purchased a new car at the beginning of the month for $16,800 cash. The car is expected to have a useful life of four years. 5. Salaries owed to employees at the end of the month total $5,300. The salaries will be paid on July 5th Instructions Prepare a correct income statement