Student Name:

Week 3 Checkpoint – Part 1 (4 points) Classify the following adjusting journal entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR).

|AE |To record utilities expense incurred, but not yet recorded or paid. |
|PE |To record expiration of rent paid in advance. |
|UR |To record revenue earned that was previously received as cash in advance. |
|AR |To record services performed, but not yet recorded or billed. |

Week 3 Checkpoint - Part 2 (8 points)
Warrior, Co. recently completed its first year of operations. The company earned $70,200 in revenues and $11,700 of these were Accounts Receivable. (Hint: Also determine how much of the revenues were Cash) The company also incurred expenses of $48,600, but had not paid $6,400 of them at year-end. Separately, Warrior Co. also prepaid $3,750 cash for expenses that would be incurred the next year.

Required: Calculate Warrior Co.’s first year net income using both the cash basis and the accrual basis of accounting.

|Cash Basis Income Statement | |Accrual Basis Income Statement |
|Revenues: $58,500 (cash) | |Revenues: $70,200 |
| | | |
|Expenses: $45,950 (42,200 + 3,750) | |Expenses: $48,600