Problem 10
Classify the following items as: a) Deferred expense (prepaid expense) b) Deferred revenue (unearned revenue) c) Accrued expense (accrued liability) d) Accrued revenue (accrued asset) e) Depreciation | 1. A three-year premium paid on a fire insurance policy. | | 2. Utilities owed but not yet paid. | | 3. Supplies on hand. | | 4. Salary owed but not yet paid. | | 5. Interest owed but payable in the following period. | | 6. Subscriptions received in advance by a newspaper publisher. (publisher’s point of view) | | 7. Professional Fees received but not yet earned. | | 8. Professional Fees earned but not yet received. | | 9. Interest paid in advance from a bank loan. (borrower’s point of view) | | 10. Rent collected in advance. (lessor’s point of view) | | 11. Services rendered but uncollected. | | 12. Advertising paid in advance for 3 months. | | 13. Income collected but not yet earned. | | 14. Rent paid in advance. (lessee’s point of view) | | 15. Interest collected in advance by the creditor. (borrower’s point of view) |

Problem 11 (Weygant, et al, page 122)

Greg Toohey opened a dental practice on 1 January. During the first month of operations the following transactions occurred.

1. Performed services for patients. As at 31 January, P1,560 of such services was earned but not yet recorded. 2. Utility expense incurred but not paid prior to 31 January totaled P800. 3. Purchased dental equipment on 1 January for P80,000, paying P20,000 in cash and signing a P60,000, 3 year-note payable. The equipment depreciates P400 per month. Interest is P500 per month. 4. Purchased a 1-year professional indemnity insurance policy on 1 January for P24,000. 5. Purchased P1,600 of dental supplies. On 31 January, determined that P800 of supplies were on hand.

Instructions:
Prepare the