Balance sheet Accounts

Cash Accounts receivable

_{Bal. 8,000 Bal. 9,000}

12/31 Bal.8,00012/31 Bal.9,000

Prepaid insurance Allow. for uncollectible accounts

_{Bal. 3,000 50 Bal.}

_{1,500 Adjusting 850 Adjusting}

12/31 Bal.1,500 90012/31 Bal.

Land Buildings

_{Bal. 200,000 Bal. 50,000}

12/31 Bal.200,00012/31 Bal.50,000

Equipment Accumulated depreciation-bldg.

_{Bal. 100,000 20,000 Bal.}

_{1,000 Adjusting}

12/31 Bal.100,000 21,00012/31 Bal.

Accumulated depreciation-equip. Accounts payable

_{40,000 Bal. 35,000 Bal.}

_{10,000 Adjusting}

50,000 12/31 Bal.35,00012/31 Bal.

Problem 2-9 (continued)

Salaries payable Unearned rent revenue

_{0 Bal. 0 Bal.}

_{1,500 Adjusting 1,200 Adjusting}

1,500 12/31 Bal.1,20012/31 Bal.

Common stock Retained earnings

_{200,000 Bal. 56,450 Bal.}

200,000 12/31 Bal.56,45012/31 Bal.

InCome statement Accounts

Sales revenue Interest revenue

_{90,000 Bal. 3,000 Bal.}

90,000 12/31 Bal.3,00012/31 Bal.

Rent revenue Salaries expense

_{7,500 Bal. Bal. 37,000}

_{Adjusting 1,200 Adjusting 1,500}

6,300 12/31 Bal.12/31 Bal.38,500

Bad debt expense Depreciation expense

_{Bal. 0 Bal. 0}

_{Adjusting 850 Adjusting 1,000}

_{Adjusting 10,000}

12/31 Bal.85012/31 Bal.11,000

Problem 2-9 (continued)

Insurance expense Utility expense

_{Bal. 0 Bal. 30,000}

_{Adjusting 1,500}

12/31 Bal.1,50012/31 Bal.30,000

Maintenance expense

_{Bal. 15,000}

12/31 Bal.15,000

Problem 2-9 (continued)

Requirement 3

Account Title	Debits		Credits
Cash	8,000
Accounts receivable	9,000
Allowance for uncollectible accounts			900
Prepaid insurance	1,500
Land	200,000
Buildings	50,000
Accumulated depreciation-buildings			21,000
Equipment	100,000
Accumulated depreciation-equipment			50,000
Accounts payable			35,000
Salaries payable			1,500
Unearned rent revenue			1,200
Common stock			200,000
Retained earnings			56,450
Sales revenue			90,000
Interest revenue			3,000
Rent revenue			6,300
Salaries expense	38,500
Bad debt expense	850
Depreciation expense	11,000
Insurance expense	1,500
Utility expense	30,000
Maintenance expense	15,000		______
Totals	465,350		465,350

Problem 2-9 (continued)

Requirement 4

December 31, 2011

Sales revenue 90,000

Interest revenue 3,000

Rent revenue 6,300

Income summary 99,300

Income summary 96,850

Salaries expense 38,500

Bad debt expense 850

Depreciation expense 11,000

Insurance expense 1,500

Utility expense 30,000

Maintenance expense 15,000

Income summary ($99,300 - 96,850)2,450

Retained earnings 2,450

Problem 2-9 (concluded)

Requirement 5

Account Title	Debits		Credits
Cash	8,000
Accounts receivable	9,000
Allowance for uncollectible accounts			900
Prepaid insurance	1,500
Land	200,000
Buildings	50,000
Accumulated depreciation-buildings			21,000
Equipment	100,000
Accumulated depreciation-equipment			50,000
Accounts payable			35,000
Salaries payable			1,500
Unearned rent revenue			1,200
Common stock			200,000
Retained earnings	______		58,900
Totals	368,500		368,500

Problem 2-10

Computations:

Sales revenue

Sales revenue during 2011 = $320,000 + 22,000 = $342,000

Cost of goods sold

Accounts payable

0 1/1 Balance

Cash paid 220,000

? Purchases

30,000 12/31 Balance

Purchases during 2011 = $220,000 + 30,000 = $250,000

Inventory

1/1 Balance 0

Purchases 250,000

? Cost of goods sold

12/31 Balance 50,000

Cost of goods sold during 2011 = $250,000 - 50,000 = $200,000

Rent expense and prepaid rent

Prepaid rent = $ 3,000 x ²/3 = $2,000

Rent expense during 2011 = $14,000 - 2,000 = $12,000

Depreciation expense

Depreciation during 2011 = $30,000 x 10% = $3,000