Exercise 2–13 December 31, 2013 Sales revenue ................................................................... 492,000 Interest revenue ............................................................... 6,000 Gain on sale of investments ........................................... 8,000 Income summary ......................................................... 506,000 Income summary ............................................................. 440,000 Cost of goods sold ....................................................... 284,000 Salaries expense .......................................................... 80,000 Insurance expense ....................................................... 12,000 Interest expense ........................................................... 4,000 Advertising expense .................................................... 10,000 Income tax expense ..................................................... 30,000 Depreciation expense ................................................. 20,000 Income summary ($506,000 – 440,000) .............................. Retained earnings ....................................................... 66,000 Exercise 2–14 Requirement 1 Supplies 11/30 Balance 1,500 Expense Purchased ? 2,000 12/31 Balance 3,000 Cost of supplies purchased = $3,000 + 2,000 – 1,500 = $3,500 2–26 66,000 Exercise 2–14 (continued) Requirement 2 Prepaid insurance 11/30 Balance 6,000 Expense ? 12/31 Balance 4,500 Insurance expense for December = $6,000 – 4,500 = $1,500 December 31, 2013 Insurance expense ........................................................... Prepaid insurance........................................................ 1,500 1,500 Requirement 3 Wages paid Wages payable 10,000 11/30 Balance 10,000 ? Accrued wages 15,000 12/31 Balance Accrued wages for December = $15,000 December 31, 2013 Wages expense ............................................................... Wages payable ............................................................ 15,000 15,000 2– Solutions Manual, Vol.1, Chapter 2 27 Exercise 2–14 (concluded) Requirement 4 Unearned rent revenue 2,000 11/30 Balance Earned for Dec. 1,000 1,000 12/31 Balance Rent revenue recognized each month = $3,000 x 1/3 = $1,000 December 31, 2013 Unearned rent revenue .................................................... Rent revenue................................................................ 2–28 1,000 1,000