Section 3 Inclass Quiz Solution

Section 3 Inclass Quiz Solution - Salaries Expense 18,000...

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Acc 200P Name: ________________________ Lab Section #_________________ Section 3 – Accrual Basis of Accounting SOLUTION Assuming a company uses the accrual basis of accounting, (1) Indicate the financial statement in which each of the following account balances would be found, and (2) Calculate Net income, Total Assets, Total Liabilities, and Total Owner’s Equity Accounts Payable 4,000 BS – liability Accounts Receivable 2,000 BS – asset Cash 5,000 BS – asset Contributed Capital 1,000 BS – owners’ equity Dividends 4,000 Statement of RE Equipment 50,000 BS – asset Interest Expense 400 Inc. Stmt Interest Payable 800 BS – liability Insurance Expense 25,000 Inc. Stmt Prepaid Insurance 500 BS – asset Retained Earnings – Beginning 900 Statement of RE
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Unformatted text preview: Salaries Expense 18,000 Inc. Stmt Service Revenue 100,000 Inc. Stmt Supplies 1,000 BS asset Supplies Expense 2,000 Inc. Stmt Unearned Revenue 1,200 BS liability Service Revenue $100,000 Accounts Payable $4,000 Interest Expense (400) Interest Payable 800 Insurance Expense (25,000) Unearned Revenue 1,200 Supplies Expense (2,000) Total Liabilities $ 6,000 Salaries Expense (18,000) Net Income $ 54,600 Beginning RE $ 900 Add: Net income 54,600 Less: Dividends (4,000) Accounts Receivable $2,000 Ending RE $51,500 * Cash 5,000 Equipment 50,000 Contributed Capital $1,000 Prepaid Insurance 500 RE * 51,500 Supplies 1,000 Total Owners Equity $ 52,500 Total Assets $ 58,500...
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