Problem 1: Ramsey Corporation reported the following accounts and balances in its financial statements:
|
Cash
|
$35,000
|
|
Inventory
|
510,200
|
|
Equipment
|
519,500
|
|
Accounts payable
|
516,350
|
|
Contributed capital
|
530,000
|
|
Retained earnings
|
518,350
|
Arrange the accounts and balances into the accounting equation using the following equation and then answer the following questions: Assets = liabilities + owners' equity
1. What is the total amount of assets?
2. What is the total amount of liabilities?
3. What is the total amount of owners' equity?
Problem 2: After sk months of operations, Right Way Lumber had the following revenues and expense balances:
|
Supplies expense
|
$11,000
|
|
Service revenue
|
862,090
|
|
Utilities expense
|
86,200
|
|
Rent expense
|
814,700
|
|
Wages expense
|
813,330
|
Prepare an income statement in its proper format ending on June 30, 2009. You should include the heading and left align it so the formatting is understandable.
Problem 3: Jim Smith had trouble finding a job, so he decided to start his own sole proprietorship by the name of Designers Inc. Jim is a Web site designer, and here are the results as of the end of the first year of his business.
|
Accounts payable
|
512,100
|
|
Cash
|
519,150
|
|
Service revenue
|
520,000
|
|
Contributed capital
|
521,000
|
|
Wages expense
|
4,100
|
|
Inventory
|
4,445
|
|
Rent expense
|
5,000
|
|
Equipment
|
516,325
|
|
Supplies expense
|
54,080
|
|
Retained earnings
|
56,820
|
Prepare a balance sheet in its proper format with the heading left aligned.
Problem 4: Utopia Dance Clubs, Inc., rented an old warehouse for its newest club on October 1, 2010. To receive a discount, Utopia paid $11,700 for 18 months of rent in advance. Assume no additional rent is paid in 2011 and 2012 and answer the following questions:
a. How much rent expense will be recognized for the year ended December 31, 2010?
b. What will be the balance in the prepaid rent account at December 31, 2010?
c. How much rent expense will be recognized for the year ended December 31, 2011?
d. What will be the balance in the prepaid rent account at December 31, 2011?
e. How much rent expense will be recognized for the year ended December 31, 2012?
f. What will be the balance in the prepaid rent account at December 31, 2012?