20 Lecture 4a-ch. 4

20 Lecture 4a-ch. 4 - For the Year Ended December 31, 2009...

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Solutions to exercises for lecture 3b: ch. 4a M4-1 1. A, D 2. B, C 3. A, E 4. B, F M4-5 Assets = Liabilities + Stockholders’ Equity a = Unearned Rent Revenue - 400 Rent Revenue (+R) +400 b Prepaid Insurance - 100 = Insurance Expense (+E) - 100 c Accumulated Depreciation (+xA) - 400 = Depreciation Expense (+E) - 400 M4-6 a. dr Unearned Rent Revenue ( - L) 400 cr Rent Revenue (+R, +SE) 400 ($400 = 1/3 x $1,200) b. dr Insurance Expense (+E, - SE) 100 cr Prepaid Insurance ( - A) 100 ($100 = 1/24 x $2,400) c. dr Depreciation Expense (+E, - SE) 400 cr Accumulated Depreciation (+xA, - A) 400 ($400 = 1/12 x $4,800)
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M4-12 SKY BLUE CORPORATION Income Statement For the Year Ended December 31, 2009 Revenues: Sales Revenue Rent Revenue Total Revenues Expenses: Wages Expense Rent Expense Insurance Expense Depreciation Expense Utilities Expense Income Tax Expense Total Expenses $ 42,030 300 42,330 21,600 9,000 1,400 1,300 1,220 2,900 37,420 Net Income $ 4,910 The Sky Blue Corporation generated $4,910 of net income during 2009. M4-13 SKY BLUE CORPORATION Statement of Retained Earnings
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Unformatted text preview: For the Year Ended December 31, 2009 Balance, January 1, 2009 $ 1,000 Add: Net Income 4,910 Subtract: Dividends Declared (300) Balance, December 31, 2009 $ 5,610 M4-14 SKY BLUE CORPORATION Balance Sheet At December 31, 2009 Assets Current Assets: Cash Accounts Receivable Prepaid Insurance Total Current Assets Notes Receivable Equipment $12,000 Accumulated Depreciation (2,600) Total Assets Liabilities Current Liabilities: Accounts Payable Accrued Liabilities Payable Wages Payable Income Taxes Payable Unearned Rent Revenue Total Current Liabilities Stockholders Equity Contributed Capital Retained Earnings Total Stockholders Equity Total Liabilities and Stockholders Equity $ 1,230 2,000 2,300 5,530 3,000 9,400 $ 17,930 $ 1,600 3,820 1,000 2,900 600 9,920 2,400 5,610 8,010 $ 17,930 Sky Blues total assets are financed more by debt ($9,920) than by equity ($8,010)....
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20 Lecture 4a-ch. 4 - For the Year Ended December 31, 2009...

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