CHAPTER 3 WILEY PLUS HW Helpful Hints:
E3-17 & BE 3-9, E3-5, and BE 123- No special hints should be necessary.
E3-6 & E3-8 – Since there is no “Utilities Payable” account in your list of accounts, just use
Accounts Payable instead. In E3-8, notice that in addition to the Utilities Expenses account,
there is also a Telephone & Internet Expenses account.
E3-11 & E 127 - You must complete Part (a) successfully before you will be able to progress to
Part (b), etc. Be sure to pay careful attention to the instructions in red print for each part
(e.g., listing negative amounts (like Net Losses) using a “-“sign and listing Current
Assets in order of liquidity. Use our in-class work on Exercise 3-12 (a) to assist you.
BE 3-11 Use our in-class work on Exercise 3-16 to help you with this exercise
P 133 You must complete Part (a) successfully before you will be able to progress to Part (b).
Use your work on previous WP+ AJE exercises to help with Part (a). Pay careful attention to
the instructions in red print for each part and if you need help with account classifications in
Part (b), please review the listing I provided for you at the end of Chapter 3 Notes. Remember,
if the account is on the I/S you are to select “Not Applicable.”
P 135 You must complete Part (a) successfully before you will be able to progress to Part (b).
Be sure to pay careful attention to the instructions in red print for each part.
In Part (a), adjustment (b), you are being asked to make the AJE for Bad Debts based on
the Percentage of SALES approach. The percentage of sales approach does NOT require that
you factor in any pre-existing balance in the ADA account but rather just calculate the amount
based on whatever is given as the % multiplied times the Sales figure given. That amount is
the amount for the AJE. No further calculation necessary.
In Part (a) letter (d), you will be calculating interest on a Note Receivable instead of a Note
Payable (which is what we reviewed in class). You will still calculate interest in the same
manner (P x I x T) but rather than OWING interest, you will be recording interest being
EARNED. Therefore, the accounts you will need to use are Interest Receivable and Interest
Revenue rather than Interest Expense/Payable.
In Part (a), letter (e), since the rent paid in advance by Fisk was originally charged to the
Rent Expense account rather than to the Prepaid Rent account, you will need to do the
opposite of what you would normally do in making a prepaid expense type adjustment.
For Part (b), use our in-class work on Exercise 3-16 & WP BE 3-11 and don’t forget to update
the balances in the accounts you are closing for any increases or decreases that occurred as a
result of making the adjustments in Part (a)
E125 – In #2, be careful in making your interest calculation. The interest rate given is an
annual rate and the period of time that the Note Receivable has been outstanding is LESS
than a year. Therefore, don’t forget to make sure you use the # of months/12 as the “T” in
making your P x I x T calculation. Also, like (d) in P 135 above, we are recording interest
EARNED, so be sure to use the correct interest accounts.
In #3, refer to my hint for Part (a) letter (e) in P 135 above and see if you can apply the same
concept to an unearned revenue situation. Be sure to pay careful attention to the dates!