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Peng Company accumulates the following adjustment data at December 31.
(a) Service Revenue earned but unbilled totals $600.
(b) Store supplies of $160 are on hand. Supplies account shows $1,900 balance.
(c) Utility expenses of $275 are unpaid.
(d) Service revenue of $490 collected in advance has been earned.
(e) Salaries of $620 are unpaid.
(f) Prepaid insurance totaling $400 has expired.
Instructions
For each item, indicate (1) the type of adjustment (prepaid expense, unearned revenue, accrued revenue, or accrued expense) and (2) the status of the accounts before adjustment (overstated or understated).
Prepare a perpetual inventory record for Classique Designs, to determine the value of ending inventory at December 31, 2013, and the total amount to be assigned to cost of goods sold for the period.
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Determining appropriate product costs is essential to reporting a reliable inventory valuation. Fraud examiners have indicated that scams that involve product costs and expenses are relatively easy to detect.
Prepare a schedule of expected cash collections for April, May, and June, and for the three months in total.
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