Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Textbook Question
Chapter 3, Problem 3.78DC
LO 3, 6
(Learning Objectives 3, 6: Adjust the accounts; analyze and evaluate liquidity) The unadjusted
Cash.................................................... | $ 8,000 |
Accounts receivable............................. | 4,200 |
Supplies............................................... | 800 |
Prepaid rent......................................... | 1,200 |
Land.................................................... | 43,000 |
Accounts payable................................ | 12,000 |
Salary payable..................................... | 0 |
Unearned service revenue.................... | 700 |
Note payable, due in three years......... | 23,400 |
Common stock.................................... | 5,000 |
Retained earnings................................ | 9,300 |
Service revenue.................................... | 9,100 |
Salary expense..................................... | 3,400 |
Rent expense....................................... | 0 |
Advertising expense............................. | 900 |
Supplies expense.................................. | 0 |
Requirements
- 1. How much out of balance is the trial balance? Notes Payable (the only error) is understated.
- 2. Stone Park Services needs to make the following adjustments at January 31:
- a. Supplies of $400 were used during January.
- b. The balance of prepaid rent was paid on January 1 and covers the entire calendar year of 2019. No adjustment was made on January 31.
- c. At January 31, Stone Park Services owed employees $1,000.
- d. Unearned service revenue of $500 was earned during January.
Prepare a corrected, adjusted trial balance. Give Notes Payable its correct balance.
- 3. After the error is corrected and after these adjustments are made, calculate and analyze the current ratio of Stone Park Services, Inc. Analyze this current ratio.
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SUBJECT: Financial Accounting and Reporting
Instruction: Choose the Debit and Credit Accounts of the following transactions.
TRANSACTION: Opened an account with Bank and made initial deposit1. Debit *a. Cash In Bankb. Accounts Receivablec. Unused Laundy Suppliesd. Prepaid Insurancee. Equipmentf. Accounts Payableg. Unearned Incomeh. Amora, Drawingi. Amora, Capitalj. Service Incomek. Salaries ExpenseL.Taxes and Licensesm.Transportation
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Chapter 3 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
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