26. Problem 2-2 (continued)

Requirements 1 and 3 balance sheet Accounts

Cash Accounts receivable

_{1/1 Bal. 5,000 1/1 Bal. 2,000}

_{1/1 3,500 800 1/13 1/8 5,000 4,000 1/18}

_{1/18 4,000 5,500 1/16}

_{800 1/20}

_{3,000 1/30}

_{1,000 1/31}

1/31 Bal.1,4001/31 Bal.3,000

Inventory Equipment

_{1/1 Bal. 5,000 1/1 Bal. 11,000}

_{1/10 9,500 2,000 1/1 1/2 5,500}

_{2,800 1/8 1/13 800}

1/31 Bal.9,7001/31 Bal.17,300

Accumulated depreciation Accounts payable

_{3,500 1/1 Bal. 3,000 1/1 Bal.}

_{1/16 5,500 5,500 1/2}

_{150 1/4}

_{9,500 1/10}

3,500 1/31 Bal.12,6501/31 Bal.

Common stock Retained earnings

_{10,000 1/1 Bal. 6,500 1/1 Bal.}

_{1/31 1,000}

10,000 1/31 Bal.5,5001/31 Bal.

27. Problem 2-2 (continued)

InCome statement Accounts

Sales revenue Cost of goods sold

_{0 1/1 Bal. 1/1 Bal. 0}

_{3,500 1/1 1/1 2,000}

_{5,000 1/8 1/8 2,800}

8,500 1/31 Bal.1/31 Bal.4,800

Rent expense Wage expense

_{1/1 Bal. 0 1/1 Bal. 0}

_{1/20 800 1/30 3,000}

1/31 Bal.8001/31 Bal.3,000

Advertising expense

_{1/1 Bal. 0}

_{1/4 150}

1/31 Bal.150

Problem 2-2 (concluded)

Requirement 4

Account Title	Debits		Credits
Cash	1,400
Accounts receivable	3,000
Inventory	9,700
Equipment	17,300
Accumulated depreciation			3,500
Accounts payable			12,650
Common stock			10,000
Retained earnings			5,500
Sales revenue			8,500
Cost of goods sold	4,800
Wage expense	3,000
Rent expense	800
Advertising expense	150		______
Totals	40,150		40,150

1

Problem 2-3

.Depreciation expense 10,000

Accumulated depreciation 10,000

2.Bad debt expense($5,500 - 3,000)2,500

Allowance for uncollectible accounts 2,500

3.Wage expense 1,500

Wages payable 1,500

4.Interest expense($50,000 x 12% x ³/12)1,500

Interest payable 1,500

5.Interest receivable($20,000 x 8% x ¹⁰/12)1,333

Interest revenue 1,333

6.Prepaid insurance($6,000 x ¹⁵/24)3,750

Insurance expense 3,750

7.Supplies expense($1,500 - 800)700

Supplies 700

8.Sales revenue 2,000

Unearned revenue 2,000

9.Rent expense 1,000

Prepaid rent 1,000

Problem 2-4

Requirements 1 and 2