At the end of its first year, the trial balance of Denton Company shows Equipment $30,000 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the year is estimated to be $5,000. Prepare the adjusting entry for depreciation at December 31, post the adjustments to T accounts, and indicate the balance sheet presentation of the equipment at December 31.

Using the data in BE3-5, journalize and post the entry on July 1 and the adjusting entry on December 31 for Randle Insurance Co. Randle uses the accounts Unearned Insurance Revenue and Insurance Revenue.

The trial balance of Bair Company includes the following balance sheet accounts. Identify the accounts that may require adjustment. For each account that requires adjustment, indicate

(a) the type of adjusting entry (prepaid expenses, unearned revenues, accrued revenues,

and accrued expenses) and

(b) the related account in the adjusting entry.

Accounts Receivable

Interest Payable

Prepaid Insurance

Unearned Service Revenue

Accumulated Depreciation—Equipment

Partial adjusted trial balance data for Harmony Company Inc. is presented in BE3-9. The balance in Common Stock is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $10,600 for the year and Retained Earnings is $0 on January 1.

Numerous timing concepts are discussed on pages 98 and 99. A list of concepts is provided below, on the left, with a description of the concept on the right. There are more descriptions provided than concepts. Match the description of the concept to the concept.

1. ____ Cash-basis accounting.

(a) Monthly and quarterly time periods.

2. ____ Fiscal year.

(b) Accountants divide the economic life of a business into artificial time periods.

3. ____ Revenue recognition principle.

(c) Efforts (expenses) should be matched with accomplishments (revenues).

4. ____ Expense recognition principle.

(d) Companies record revenues when they receive cash and record expenses when they pay out cash.

(e) An accounting time period that is one year in length.

(f) An accounting time period that starts on January 1 and ends on December 31.

(g) Companies record transactions in the period in which the events occur.

(h) Recognize revenue in the accounting period in which it is earned.