Answer:
a) Balance Sheet as of December 31, 20xx:
Assets:
Cash $25,486
Prepaid Rent 5,700
Supplies 4,400
Total current assets $35,586
Building 100,000
Acc. Depreciation (6,000) $94,000
Total assets $129,586
Current Liabilities:
Accounts Payable $1,800
Deferred Revenue 1,300
Total current liabilities $3,100
Notes Payable (due in
24 months 80,486
Total liabilities $83,586
Common Stock 2,100
Retained Earnings 43,900 46,000
Total liabilities and equity $129,586
b) Total current assets = $35,586
Explanation:
a) Data and Calculations:
Adjusted Trial
Balance as of 12/31/20xx
Accounts Debit Credit
Cash $25,486
Prepaid Rent 5,700
Supplies 4,400
Building 100,000
Accumulated Depreciation $6,000
Accounts Payable 1,800
Deferred Revenue 1,300
Notes Payable (due in 24 months 80,486
Common Stock 2,100
Retained Earnings 46,400
Dividends 4,000
Service Revenue 12,400
Rent Expense 900
Supplies Expense 3,000
Utility Expense 1,000
Depreciation Expense 6,000
Totals $150,486 $150,486
Additional data:
Beginning Balance of Common Stock on 1/1/20xx $2,100
Beginning Balance of Retained Earnings on 1/1/20xx $46,400
Income Statement for the year ended December 31, 20xx
Service Revenue $12,400
Rent Expense 900
Supplies Expense 3,000
Utility Expense 1,000
Depreciation Expense 6,000 10,900
Net Income 1,500
Statement of Stockholders' Equity:
Beginning Common Stock on 1/1/20xx $2,100
Beginning Retained Earnings on 1/1/20xx 46,400
Net Income 1,500
Dividends (4,000)
Ending Equity balance on 12/31/20xx $46,000
Retained Earnings on 12/31/20xx:
Beginning Retained Earnings on 1/1/20xx 46,400
Net Income 1,500
Dividends (4,000)
Retained Earnings on 12/31/20xx $43,900
