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Cash Accounts receivable
__________________________ __________________________
Bal. 30,000 Bal. 40,000
_______________ _______________
12/31 Bal. 30,000 12/31 Bal. 40,000
Prepaid rent Allowance for uncollectible accounts
__________________________ __________________________
Bal. 2,000 3,000 Bal.
1,000 9. 2,500 2.
_______________ _______________
Bal. 1,000 5,500 12/31 Bal.
Prepaid insurance Supplies
__________________________ __________________________
Bal. 0 Bal. 1,500
6. 3,750 700 7.
_______________ _______________
12/31 Bal. 3,750 12/31 Bal. 800
Inventory Note receivable
__________________________ __________________________
Bal. 60,000 Bal. 20,000
_______________ _______________
12/31 Bal. 60,000 12/31 Bal. 20,000
Equipment Interest receivable
__________________________ __________________________
Bal. 80,000 Bal. 0
5. 1,333
_______________ _______________
12/31 Bal. 80,000 12/31 Bal. 1,333
Problem 2-4 (continued)
Accumulated depreciation Accounts payable
__________________________ __________________________
30,000 Bal. 28,000 Bal.
10,000 1.
_______________ _______________
40,000 12/31 Bal. 28,000 12/31 Bal.
Wages payable Note payable
__________________________ __________________________
0 Bal. 50,000 Bal.
1,500 3.
_______________ _______________
1,500 12/31 Bal. 50,000 12/31 Bal.
Interest payable Unearned revenue
__________________________ __________________________
0 Bal. 0 Bal.
1,500 4. 2,000 8.
_______________ _______________
1,500 12/31 Bal. 2,000 12/31 Bal.
Common stock Retained earnings
__________________________ __________________________
60,000 Bal. 24,500 Bal.
_______________ _______________
60,000 12/31 Bal. 24,500 12/31 Bal.
Problem 2-4 (continued)
InCOME STATEMENT Accounts
Sales revenue Interest revenue
__________________________ __________________________
148,000 Bal. 0 Bal.
8. 2,000 1,333 5.
_______________ _______________
146,000 12/31 Bal. 1,333 12/31 Bal.
Cost of goods sold Wage expense
__________________________ __________________________
Bal. 70,000 Bal. 18,900
3. 1,500
_______________ _______________
12/31 Bal. 70,000 12/31 Bal. 20,400
Rent expense Depreciation expense
__________________________ __________________________
Bal. 11,000 Bal. 0
9. 1,000 1. 10,000
_______________ _______________
12/31 Bal. 12,000 12/31 Bal. 10,000
Interest expense Supplies expense
__________________________ __________________________
Bal. 0 Bal. 1,100
4. 1,500 7. 700
_______________ _______________
12/31 Bal. 1,500 12/31 Bal. 1,800
Insurance expense Bad debt expense
__________________________ __________________________
Bal. 6,000 Bal. 3,000
3,750 6. 2. 2,500
_______________ _______________
12/31 Bal. 2,250 12/31 Bal. 5,500
Problem 2-4 (continued)
Requirement 3
| Account Title | Debits | Credits | ||
| Cash | 30,000 | |||
| Accounts receivable | 40,000 | |||
| Allowance for uncollectible accounts | 5,500 | |||
| Prepaid rent | 1,000 | |||
| Prepaid insurance | 3,750 | |||
| Supplies | ||||
| Inventory | 60,000 | |||
| Note receivable | 20,000 | |||
| Interest receivable | 1,333 | |||
| Equipment | 80,000 | |||
| Accumulated depreciation-equipment | 40,000 | |||
| Accounts payable | 28,000 | |||
| Wages payable | 1,500 | |||
| Note payable | 50,000 | |||
| Interest payable | 1,500 | |||
| Unearned revenue | 2,000 | |||
| Common stock | 60,000 | |||
| Retained earnings | 24,500 | |||
| Sales revenue | 146,000 | |||
| Interest revenue | 1,333 | |||
| Cost of goods sold | 70,000 | |||
| Wage expense | 20,400 | |||
| Rent expense | 12,000 | |||
| Depreciation expense | 10,000 | |||
| Interest expense | 1,500 | |||
| Supplies expense | 1,800 | |||
| Insurance expense | 2,250 | |||
| Bad debt expense | 5,500 | ______ | ||
| Totals | 360,333 | 360,333 | ||
Problem 2-4 (continued)
Requirement 4
| PASTINA COMPANY | ||||||||
| Income Statement | ||||||||
| For the Year Ended December 31, 2011 | ||||||||
| Sales revenue ......................................... | $146,000 | |||||||
| Cost of goods sold ................................. | 70,000 | |||||||
| Gross profit ........................................... | 76,000 | |||||||
| Operating expenses: | ||||||||
| Wages.................................................. | $20,400 | |||||||
| Rent .................................................... | 12,000 | |||||||
| Depreciation........................................ | 10,000 | |||||||
| Supplies .............................................. | 1,800 | |||||||
| Insurance ............................................ | 2,250 | |||||||
| Bad debt ............................................. | 5,500 | |||||||
| Total operating expenses ............ | 51,950 | |||||||
| Operating income | 24,050 | |||||||
| Other income (expense): | ||||||||
| Interest revenue .................................. | 1,333 | |||||||
| Interest expense ................................. | (1,500) | (167) | ||||||
| Net income ............................................. | $ 23,883 | |||||||
Problem 2-4 (continued)
PASTINA COMPANY
Statement of Shareholders' Equity
For the Year Ended December 31, 2011
Total
Common Retained Shareholders’
Stock Earnings Equity
Balance at January 1, 2011 $60,000 $28,500 $ 88,500
Issue of common stock - 0 - - 0 -
Net income for 2011 23,883 23,883
Less: Dividends ______ (4,000) (4,000)
Balance at December 31, 2011 $60,000$48,383$108,383
Problem 2-4 (continued)
| PASTINA COMPANY | |||||
| Balance Sheet | |||||
| At December 31, 2011 | |||||
| Assets | |||||
| Current assets: | |||||
| Cash ....................................................... | $ 30,000 | ||||
| Accounts receivable ............................... | $40,000 | ||||
| Less: Allowance for uncollectible accounts | (5,500) | 34,500 | |||
| Supplies ................................................. | |||||
| Inventory ............................................... | 60,000 | ||||
| Note receivable ....................................... | 20,000 | ||||
| Interest receivable .................................. | 1,333 | ||||
| Prepaid rent ........................................... | 1,000 | ||||
| Prepaid insurance ................................... | 3,750 | ||||
| Total current assets ............................ | 151,383 | ||||
| Equipment ................................................ | 80,000 | ||||
| Less: Accumulated depreciation ............. | (40,000) | 40,000 | |||
| Total assets ...................................... | $191,383 | ||||
| Liabilities and Shareholders' Equity | |||||
| Current liabilities | |||||
| Accounts payable .................................... | $ 28,000 | ||||
| Wages payable ........................................ | 1,500 | ||||
| Note payable .......................................... Interest payable ...................................... | 50,000 1,500 | ||||
| Unearned revenue ................................... | 2,000 | ||||
| Total current liabilities ......................... | 83,000 | ||||
| Shareholders’ equity: | |||||
| Common stock ........................................ | $60,000 | ||||
| Retained earnings .................................... | 48,383 | ||||
| Total shareholders’ equity ................... | 108,383 | ||||
| Total liabilities and shareholders’ equity | $191,383 | ||||
Problem 2-4 (continued)
Requirement 5
December 31, 2011
Sales revenue............................................................. 146,000
Interest revenue......................................................... 1,333
Income summary................................................... 147,333
Income summary....................................................... 123,450
Cost of goods sold................................................. 70,000
Wage expense........................................................ 20,400
Rent expense......................................................... 12,000
Depreciation expense............................................ 10,000
Interest expense..................................................... 1,500
Supplies expense .................................................. 1,800
Insurance expense................................................. 2,250
Bad debt expense.................................................. 5,500
Income summary ($147,333 - 123,450)........................... 23,883
Retained earnings.................................................. 23,883
Problem 2-4 (continued)
Sales revenue Interest revenue
__________________________ __________________________
148,000 Bal. 0 Bal.
8. 2,000 1,333 5.
Closing 146,000 Closing 1,333
_______________ _______________
0 12/31 Bal. 0 12/31 Bal.
Cost of goods sold Wage expense
__________________________ __________________________
Bal. 70,000 Bal. 18,900
3. 1,500
70,000 Closing 20,400 Closing
_______________ _______________
12/31 Bal. 0 12/31 Bal. 0
Date: 2015-12-11; view: 1683
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