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Cash Accounts receivable__________________________ __________________________ 6/1 Bal. 65,000 6/1 Bal. 43,000 4. 180,000 40,000 2. 3. 200,000 180,000 4. 145,000 5. _______________ _______________ 6/30 Bal. 60,000 6/30 Bal. 63,000
Inventory Accounts payable __________________________ __________________________ 6/1 Bal. 0 6/1 Bal. 22,000 1. 165,000 120,000 3. 5. 145,000 165,000 1. _______________ _______________ 6/30 Bal. 45,000 6/30 Bal. 42,000
InCOME STATEMENT Accounts Sales revenue Cost of goods sold __________________________ __________________________ 0 6/1 Bal. 6/1 Bal. 0 200,000 3. 3. 120,000 _______________ _______________ 200,000 6/30 Bal. 6/30 Bal. 120,000
Salaries expense __________________________ 6/1 Bal. 0 2. 40,000 _______________ 6/30 Bal. 40,000
Cash ............................................................................... 12,000 2.Note receivable .............................................................. 10,000 Cash ............................................................................... 10,000 3. Equipment ..................................................................... 60,000 Cash ............................................................................... 60,000
Prepaid insurance ........................................................... 3,000 2.Interest receivable ($10,000 x 6% x 6/12)............................ 300 Interest revenue............................................................... 300 3. Depreciation expense...................................................... 12,000 Accumulated depreciation - equipment........................... 12,000
Unearned service revenue ............................................... 4,000 2. Advertising expense ($2,000x 1/2)....................................... 1,000 Prepaid advertising ........................................................ 1,000 3.Salaries expense.............................................................. 16,000 Salaries payable.............................................................. 16,000 4. Interest expense ($60,000 x 8% x 4/12)................................... 1,600 Interest payable............................................................... 1,600
Sales revenue............................................................. 850,000 Income summary................................................... 850,000
Income summary....................................................... 815,000 Cost of goods sold................................................. 580,000 Salaries expense.................................................... 180,000 Rent expense......................................................... 40,000 Interest expense..................................................... 15,000
Income summary ($850,000 - 815,000)........................... 35,000 Retained earnings ................................................. 35,000
*$420,000 cash received plus $8,000 increase ($60,000 – 52,000) in amount due from customers: Cash ............................................................................ 420,000 Accounts receivable (increase in account)......................... 8,000 Sales revenue (to balance)............................................... 428,000
** $35,000 cash paid less $2,000 decrease in amount owed to utility company: Utilities expense (to balance) ......................................... 33,000 Utilities expense payable (decrease in account)................ 2,000 Cash ............................................................................... 35,000 Exercises
1. + 300,000 (cash) + 300,000 (common stock) 2. - 10,000 (cash) + 40,000 (equipment) + 30,000 (note payable) 3. + 90,000 (inventory) + 90,000 (accounts payable) 4. + 120,000 (accounts receivable) + 120,000 (revenue) - 70,000 (inventory) - 70,000 (expense) 5. - 5,000 (cash) - 5,000 (expense) 6. - 6,000 (cash) + 6,000 (prepaid insurance) 7. - 70,000 (cash) - 70,000 (accounts payable) 8. + 55,000 (cash) - 55,000 (accounts receivable) 9. - 1,000 (accumulated depreciation) - 1,000 (expense) Exercise 2-2 1. Cash.............................................................................. 300,000 Common stock................................................................ 300,000 2.Equipment...................................................................... 40,000 Note payable................................................................... 30,000 Cash ............................................................................... 10,000 3. Inventory........................................................................ 90,000 Accounts payable............................................................ 90,000 4. Accounts receivable...................................................... 120,000 Sales revenue.................................................................. 120,000 Cost of goods sold.......................................................... 70,000 Inventory........................................................................ 70,000 5. Rent expense..................................................................... 5,000 Cash................................................................................ 5,000 6. Prepaid insurance............................................................. 6,000 Cash................................................................................ 6,000 7. Accounts payable........................................................... 70,000 Cash................................................................................ 70,000 8. Cash................................................................................ 55,000 Accounts receivable........................................................ 55,000 9. Depreciation expense........................................................ 1,000 Accumulated depreciation............................................... 1,000
__________________________ __________________________ 3/1 Bal. 0 3/1 Bal. 0 1. 300,000 10,000 2. 4. 120,000 55,000 8. 8. 55,000 5,000 5. 6,000 6. 70,000 7. _______________ _______________ 3/31 Bal. 264,000 3/31 Bal. 65,000
Date: 2015-12-11; view: 967
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1. Prepaid insurance........................................................... 12,000
1. Insurance expense ($12,000x 3/12)....................................... 3,000
Net income would be higher by $14,700 ($3,000 - 300 + 12,000).
1.Service revenue ................................................................ 4,000
Assets would be higher by $1,000, the amount of prepaid advertising that expired during the month. Liabilities would be lower by $21,600 ($4,000 + 16,000 + 1,600). Shareholders’ equity (and net income for the period) would be higher by $22,600.
Assets = Liabilities + Paid-in Capital + Retained Earnings
Cash Accounts receivable