{"id":746,"date":"2015-05-13T16:36:05","date_gmt":"2015-05-13T16:36:05","guid":{"rendered":"https:\/\/courses.candelalearning.com\/finacct2x10xmaster\/?post_type=chapter&p=746"},"modified":"2015-08-14T19:00:17","modified_gmt":"2015-08-14T19:00:17","slug":"exercises-unit-2","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/chapter\/exercises-unit-2\/","title":{"raw":"Exercises: Unit 2","rendered":"Exercises: Unit 2"},"content":{"raw":"

\u00a0SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS<\/h3>\r\n
\r\n\r\nQuestions:<\/strong>\r\n\r\n\u27a2\u00a0 Accounting has often been called the language of business. In what respects would you agree with this description? How might you argue that this description is deficient?\r\n\r\n\u27a2\u00a0 Define asset, liability, and stockholders\u2019 equity.\r\n\r\n\u27a2\u00a0 How do liabilities and stockholders\u2019 equity differ? How are they similar?\r\n\r\n\u27a2\u00a0 How do accounts payable and notes payable differ? How are they similar?\r\n\r\n\u27a2\u00a0 Define revenues. How are revenues measured?\r\n\r\n\u27a2\u00a0 Define expenses. How are expenses measured?\r\n\r\n\u27a2\u00a0 What is a balance sheet? On what aspect of a business does the balance sheet provide information?\r\n\r\n\u27a2\u00a0 What is an income statement? On what aspect of a business does this statement provide information?\r\n\r\n\u27a2\u00a0 What information does the statement of retained earnings provide?\r\n\r\n\u27a2\u00a0 Identify the three types of activities shown in a statement of cash flows.\r\n\r\n\u27a2\u00a0 What is a transaction? What use does the accountant make of transactions? Why?\r\n\r\n\u27a2\u00a0 What is the accounting equation? Why must it always balance?\r\n\r\n\u27a2\u00a0 Give an example from your personal life that illustrates your use of accounting information in reaching a decision.\r\n\r\n\u27a2\u00a0 You have been elected to the governing board of your church. At the first meeting you attend, mention is made of building a new church. What accounting information would the board need in deciding whether or not to go ahead?\r\n\r\n\u27a2\u00a0 A company purchased equipment for $ 2,000 cash. The vendor stated that the equipment was worth $ 2,400. At what amount should the equipment be recorded?\r\n\r\n\u27a2\u00a0 What is meant by money measurement?\r\n\r\n\u27a2\u00a0 Of what significance is the exchange-price (or cost) concept? How is the cost to acquire an asset determined?\r\n\r\n\u27a2\u00a0 What effect does the going-concern (continuity) concept have on the amounts at which long-term assets are carried on the balance sheet?\r\n\r\n\u27a2\u00a0 Of what importance is the periodicity (time periods) concept to the preparation of financial statements?\r\n\r\n\u27a2\u00a0 Describe a transaction that would:\r\n
    \r\n\t
  • Increase both an asset and capital stock.<\/li>\r\n\t
  • Increase both an asset and a liability.<\/li>\r\n\t
  • Increase one asset and decrease another asset.<\/li>\r\n\t
  • Decrease both a liability and an asset.<\/li>\r\n\t
  • Increase both an asset and retained earnings.<\/li>\r\n\t
  • Decrease both an asset and retained earnings.<\/li>\r\n\t
  • Increase a liability and decrease retained earnings.<\/li>\r\n\t
  • Decrease both an asset and\u00a0retained earnings.<\/li>\r\n\t
  • Identify the causes of increases and decreases in stockholders\u2019 equity<\/li>\r\n<\/ul>\r\nB) Accounting Exercises:<\/strong>\r\n\r\nExercise 1. Applying Basic Accounting Equation<\/strong>\r\n\r\nRoyals Palm, Inc. reports the following assets and liabilities. Compute the totals that would appear in the corporation\u2019s basic accounting equation (Assets = Liabilities + Stockholders\u2019 Equity (Capital Stock)).\r\n\r\n \r\n\r\nCash\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.$55,000\r\n\r\nAccounts Payable\u2026\u2026\u2026\u2026\u202625,000\r\n\r\nOffice Supplies\u2026\u2026\u2026\u2026\u2026\u2026. 1, 500\r\n\r\nLoan Payable\u2026\u2026\u2026\u2026\u2026\u2026\u2026..7,000\r\n\r\nAccounts Receivable\u2026\u2026\u2026....10,000\r\n\r\nAnswer:<\/strong>\r\n\r\n\r\n\r\n\r\n
    Assets<\/td>\r\n= Liabilities<\/td>\r\n+ Stockholders\u2019 Equity<\/td>\r\n<\/tr>\r\n
    \n\n \r\n\r\n <\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\nExercise 2. Applying Basic Accounting Equation<\/strong>\r\n\r\nDan and Den, Inc. reports the following assets and liabilities. Compute the totals that would appear in the corporation\u2019s basic accounting equation (Assets = Liabilities + Stockholders\u2019 Equity (Capital Stock)).\r\n\r\n \r\n\r\nCash\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.$37,000\r\n\r\nAccounts Payable\u2026\u2026\u2026\u2026\u202615,000\r\n\r\nSupplies\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.1, 800\r\n\r\nLoan Payable\u2026\u2026\u2026\u2026\u2026\u2026\u2026..9,000\r\n\r\nInventory\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026....12,000\r\n\r\n \r\n\r\nAnswer:<\/strong>\r\n\r\n\r\n\r\n\r\n
    Assets<\/td>\r\n= Liabilities<\/td>\r\n+ Stockholders\u2019 Equity<\/td>\r\n<\/tr>\r\n
    \n\n \r\n\r\n <\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\nExercise 3. <\/strong>Complete missing amounts in fundamental accounting equation for several businesses:<\/strong>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Assets<\/td>\r\n= Liabilities<\/td>\r\n+ Stockholders\u2019 Equity<\/td>\r\n<\/tr>\r\n
    578,000<\/td>\r\n<\/td>\r\n152,000<\/td>\r\n<\/tr>\r\n
    <\/td>\r\n25,000<\/td>\r\n180,500<\/td>\r\n<\/tr>\r\n
    127,000<\/td>\r\n17,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    269,000<\/td>\r\n\u00a045,000<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    850,000<\/td>\r\n<\/td>\r\n\u00a0675,000<\/td>\r\n<\/tr>\r\n
    <\/td>\r\n\u00a0250,000<\/td>\r\n\u00a0657,450<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\nExercise 4.\u00a0\u00a0Perez Company had the following transactions during January:<\/strong>\r\n\r\n1.\u00a0 Jan 1\u00a0 Issued $100,000 in stock to owners in exchange for cash to start the business.\r\n\r\n2.\u00a0 Jan 5\u00a0 Borrowed $50,000 from the bank by signing a notes payable.\r\n\r\n3.\u00a0 Jan 10\u00a0 Purchase equipment by paying cash for $25,000.\r\n\r\n3.\u00a0 Jan 15\u00a0 Paid January rent of $2,400\u00a0for the office space (hint:\u00a0 since this is for January, record as rent expense<\/em>)\r\n\r\n4.\u00a0 Jan 18 Performed services for customers and received cash immediately for $8,000.\r\n\r\n5.\u00a0 Jan 20\u00a0 Purchased $2,000 in supplies on account.\r\n\r\nPrepare a transaction analysis for the January transactions.\u00a0 Remember to prove the accounting equation at the end.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    <\/td>\r\nAssets\u00a0<\/strong>\u00a0<\/strong>\u00a0=<\/strong><\/td>\r\nLiability<\/strong>\u00a0<\/strong><\/td>\r\n+ Equity<\/strong><\/td>\r\n + Revenue<\/strong><\/td>\r\n- Expense<\/strong><\/td>\r\n<\/tr>\r\n
    Transaction<\/em><\/td>\r\nCash<\/td>\r\nSupplies<\/td>\r\nEquipment<\/td>\r\nAccounts Payable<\/td>\r\nNotes Payable<\/td>\r\nCommon Stock<\/td>\r\nService Revenue<\/td>\r\nRent Expense<\/td>\r\n<\/tr>\r\n
    Jan 1 Issued stock to owners<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Jan 5 Borrowed money from bank<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Jan 10 Purchased equipment with cash<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Jan 15 Paid January rent<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Jan 18 Performed services<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Jan 20 Purchased supplies on account<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Balance:<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\nExercise 5. \u00a0On\u00a0December 31, Bryniuk\u2019s Company, the accounting records showed the following information:<\/strong>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Cash<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a049,500<\/td>\r\n<\/tr>\r\n
    Accounts Receivable<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 125,000<\/td>\r\n<\/tr>\r\n
    Supplies<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,500<\/td>\r\n<\/tr>\r\n
    Prepaid Insurance<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 12,000<\/td>\r\n<\/tr>\r\n
    Equipment<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 70,000<\/td>\r\n<\/tr>\r\n
    Building<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0420,000<\/td>\r\n<\/tr>\r\n
    Land<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 111,500<\/td>\r\n<\/tr>\r\n
    Accounts Payable<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 80,000<\/td>\r\n<\/tr>\r\n
    Notes Payable<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 170,000<\/td>\r\n<\/tr>\r\n
    Common Stock<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 410,000<\/td>\r\n<\/tr>\r\n
    Retained Earnings<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a065,000<\/td>\r\n<\/tr>\r\n
    Dividends<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 20,000<\/td>\r\n<\/tr>\r\n
    Service Revenue<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 174,000<\/td>\r\n<\/tr>\r\n
    Interest Revenue<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,000<\/td>\r\n<\/tr>\r\n
    Salaries Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 52,000<\/td>\r\n<\/tr>\r\n
    Advertising Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 17,000<\/td>\r\n<\/tr>\r\n
    Insurance Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 5,000<\/td>\r\n<\/tr>\r\n
    Utilities Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13,750<\/td>\r\n<\/tr>\r\n
    Interest Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 2,750<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nPrepare the Income Statement for year ended December 31.\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Bryniuk's Company<\/strong><\/td>\r\n<\/tr>\r\n
    Income Statement<\/strong><\/td>\r\n<\/tr>\r\n
    For Year Ended December 31<\/strong><\/td>\r\n<\/tr>\r\n
    Revenues:<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 .<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Total Revenues<\/em><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Expenses:<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Total Expenses<\/em><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Net Income<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nExercise 6.\u00a0\u00a0Using the information from Exercise 5, prepare the Statement of Retained Earnings for December 31.<\/strong>\r\n\r\n
    \u00a0<\/section>
    \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Bryniuk's Company<\/strong><\/td>\r\n<\/tr>\r\n
    Statement of Retained Earnings<\/strong><\/td>\r\n<\/tr>\r\n
    For Year Ended December 31<\/strong><\/td>\r\n<\/tr>\r\n
    Beginning Retained Earnings<\/td>\r\n\u00a0\u00a0 $65,000<\/td>\r\n<\/tr>\r\n
    Add:\u00a0 Net Income<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    <\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Subtract: Dividends<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Ending Retained Earnings\u00a0\u00a0 <\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nExercise 7.\u00a0 Using the information from Exercises 5 and 6, prepare the Balance Sheet for December 31.<\/strong><\/strong>\r\n\r\n<\/section>
    \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Bryniuk's Company<\/strong><\/td>\r\n<\/tr>\r\n
    Balance Sheet<\/strong><\/td>\r\n<\/tr>\r\n
    December 31<\/strong><\/td>\r\n<\/tr>\r\n
    Assets<\/em><\/td>\r\n\u00a0<\/em><\/td>\r\nLiabilities and Equity<\/em><\/td>\r\n\u00a0<\/em><\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\nTotal Liabilities<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    \u00a0<\/strong><\/td>\r\n<\/td>\r\nTotal Equity<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    Total Assets<\/strong><\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/strong><\/td>\r\nTotal Liabilities and Equity<\/strong><\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nProblem 1:\u00a0 Prepare the financial statements of RodCast Company\u00a0using the following information:<\/strong>\r\n\r\n<\/section>
    \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
    Accounts Payable<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 43,100.00<\/td>\r\n<\/tr>\r\n
    Accounts Receivable<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 85,000.00<\/td>\r\n<\/tr>\r\n
    Cash<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 55,320.00<\/td>\r\n<\/tr>\r\n
    Common Stock<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 125,000.00<\/td>\r\n<\/tr>\r\n
    Dividends<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 28,000.00<\/td>\r\n<\/tr>\r\n
    Machinery<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 70,000.00<\/td>\r\n<\/tr>\r\n
    Rent Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 24,000.00<\/td>\r\n<\/tr>\r\n
    Retained Earnings<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 70,000.00<\/td>\r\n<\/tr>\r\n
    Salaries Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 65,000.00<\/td>\r\n<\/tr>\r\n
    Service Revenue<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 165,320.00<\/td>\r\n<\/tr>\r\n
    Supplies<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 \u00a0 2,350.00<\/td>\r\n<\/tr>\r\n
    Trucks<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 60,000.00<\/td>\r\n<\/tr>\r\n
    Utilities Expense<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13,750.00<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n1.\u00a0 Classify each account\u00a0by Account Type (Asset, Liability, Equity, Revenue or Expense)\u00a0and which financial statement (income statement, statement of retained earnings, or balance sheet) it appears on.\r\n\r\n<\/section>
    \r\n\r\n\r\n\r\n\r\n\r\n
    Account\u00a0\u00a0 <\/strong><\/td>\r\nAccount Type\u00a0 <\/strong><\/td>\r\nFinancial Statement\u00a0 <\/strong><\/td>\r\n<\/tr>\r\n
    <\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
    <\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n2.\u00a0 Prepare the Income Statement, Statement of Retained Earnings and Balance Sheet for the month ended October 31.\r\n\r\n<\/section>Comprehensive Problems Example:<\/strong>\r\n\r\n
    Larson\u2019s Accounting Company has the following account balances: Cash, $5,000; Accounts Receivable, $2,000; Prepaid Rent $1,500; Supplies, $850; Equipment, $6,000; Trucks, $15,000; Accounts Payable, $2,500; Common Stock, $20,000; Retained Earnings $7,850. Business transactions during December are presented as follows:<\/section>\r\n
      \r\n\t
    1. Company received cash from clients for services, $4,500<\/li>\r\n\t
    2. Larson paid to creditors $500,<\/li>\r\n\t
    3. Paid office rent for the month of December, $750,<\/li>\r\n\t
    4. Company billed client for accounting services on account, $5,200<\/li>\r\n\t
    5. Supplies were purchased on account, $650,<\/li>\r\n\t
    6. Company received cash from clients billed previously, $6,000<\/li>\r\n\t
    7. Larson received an invoice for office equipment repair services from Office Extra for December (the invoice will be paid next month), $850,<\/li>\r\n\t
    8. Larson paid monthly salaries, $2,700,<\/li>\r\n\t
    9. Utilities expense were paid, $280,<\/li>\r\n\t
    10. Miscellaneous expense were paid, $350,<\/li>\r\n\t
    11. Dividends were paid, $550.<\/li>\r\n<\/ol>\r\n
      \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
      <\/td>\r\nAssets\u00a0<\/strong>\u00a0\u00a0\u00a0=<\/td>\r\n\u00a0Liabilities<\/strong><\/td>\r\n\u00a0+ Stockholders\u2019 Equity <\/strong><\/td>\r\n\u00a0+ Net Income<\/strong>\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
      <\/td>\r\nCash <\/strong><\/td>\r\nAccounts Receivable<\/strong><\/td>\r\nPrepaid Rent<\/strong><\/td>\r\nSupplies <\/strong><\/td>\r\nEquipment <\/strong><\/td>\r\nTrucks<\/strong><\/td>\r\nAccounts Payable <\/strong><\/td>\r\nCommon Stock <\/strong><\/td>\r\n+ Retained Earnings<\/strong><\/td>\r\n- Dividends<\/strong><\/td>\r\nRevenue<\/strong><\/td>\r\n\u00a0- Expenses <\/strong><\/td>\r\nExpense Type<\/td>\r\n<\/tr>\r\n
      Previous Balances<\/td>\r\n$5,000<\/td>\r\n$2,000<\/td>\r\n$1,500<\/td>\r\n$850<\/td>\r\n$6,000<\/td>\r\n$15,000<\/td>\r\n$2,500<\/td>\r\n$20,000<\/td>\r\n$7,850<\/td>\r\n<\/td>\r\n<\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
      1<\/td>\r\n4,500<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n4,500<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      2<\/td>\r\n-500<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n-500<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      3<\/td>\r\n<\/td>\r\n<\/td>\r\n-750<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n750<\/td>\r\nRent expense<\/td>\r\n<\/tr>\r\n
      4<\/td>\r\n<\/td>\r\n5,200<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n5,200<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      5<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n650<\/td>\r\n<\/td>\r\n<\/td>\r\n650<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      6<\/td>\r\n6,000<\/td>\r\n-6,000<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      7<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n850<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n850<\/td>\r\nRepair expense<\/td>\r\n<\/tr>\r\n
      8<\/td>\r\n-2,700<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n2,700<\/td>\r\nSalary expense<\/td>\r\n<\/tr>\r\n
      9<\/td>\r\n-280<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n280<\/td>\r\nUtilities expense<\/td>\r\n<\/tr>\r\n
      10<\/td>\r\n-350<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n350<\/td>\r\nMisc. expense<\/td>\r\n<\/tr>\r\n
      11<\/td>\r\n-550<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/td>\r\n550<\/td>\r\n<\/td>\r\n\u00a0<\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n<\/tr>\r\n
      Ending Balance: <\/strong><\/td>\r\n$11,120 <\/strong><\/td>\r\n$1,200 <\/strong><\/td>\r\n$750 <\/strong><\/td>\r\n$1,500 <\/strong><\/td>\r\n$6,000 <\/strong><\/td>\r\n$15,000 <\/strong><\/td>\r\n$3,500 <\/strong><\/td>\r\n$20,000 <\/strong><\/td>\r\n$7,850 <\/strong><\/td>\r\n$550 <\/strong><\/td>\r\n$9,700 <\/strong><\/td>\r\n$4,930 <\/strong><\/td>\r\n\u00a0<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/section>
      \u00a0<\/strong><\/section>
      Larson Company<\/strong><\/section>
      Income Statement<\/strong><\/section>
      Month Ended December 31, 2014<\/strong><\/section>
      \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
      Fees earned<\/td>\r\n<\/td>\r\n$9,700<\/td>\r\n<\/tr>\r\n
      Expenses:<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Rent Expense<\/td>\r\n$750<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Repair Expense<\/td>\r\n850<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Wages Expense<\/td>\r\n2700<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Utilities Expense<\/td>\r\n280<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Miscellaneous expense<\/td>\r\n350<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Total Expenses<\/td>\r\n<\/td>\r\n$4,930<\/td>\r\n<\/tr>\r\n
      Net Income \u00a0($9,700 - $4,930)=<\/td>\r\n<\/td>\r\n$4,770<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/section>
      \u00a0<\/strong><\/section>
      Larson Company<\/strong><\/section>
      Statement of Retained Earnings<\/strong><\/section>
      Month Ended December 31<\/strong><\/section>
      \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
      Larson Inc., Retained Earnings, December 31<\/strong><\/td>\r\n<\/td>\r\n$ 7,850<\/td>\r\n<\/tr>\r\n
      Net income for the month<\/td>\r\n$4,770<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Less Dividends<\/td>\r\n- 550<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Increase in Stockholders\u2019 Equity<\/td>\r\n<\/td>\r\n+ 4,220<\/td>\r\n<\/tr>\r\n
      Larson Inc., Retained Earnings, December 31<\/strong><\/td>\r\n<\/td>\r\n$12,070<\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/section>
      \u00a0<\/section>
      \r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
      Larson Company<\/strong><\/td>\r\n<\/tr>\r\n
      Balance Sheet<\/strong><\/td>\r\n<\/tr>\r\n
      Month Ended December 31<\/strong><\/td>\r\n<\/tr>\r\n
      Assets<\/strong><\/td>\r\n<\/td>\r\nLiabilities<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Cash<\/td>\r\n$11,120<\/td>\r\nAccounts Payable<\/td>\r\n$3,500<\/td>\r\n<\/tr>\r\n
      Accounts Receivable<\/td>\r\n\u00a0\u00a0 1,200<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Prepaid Rent<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 750<\/td>\r\nStockholders\u2019 Equity<\/strong><\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Supplies<\/td>\r\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,500<\/td>\r\nCommon Stock<\/td>\r\n20,000<\/td>\r\n<\/tr>\r\n
      Equipment<\/td>\r\n\u00a0\u00a0\u00a0 6,000<\/td>\r\n\u00a0Retained Earnings<\/td>\r\n\u00a012,070<\/td>\r\n<\/tr>\r\n
      Trucks<\/td>\r\n\u00a0\u00a0\u00a0 15,000<\/td>\r\n<\/td>\r\n<\/td>\r\n<\/tr>\r\n
      Total Assets<\/strong><\/td>\r\n$35,570\u00a0\u00a0 \u00a0<\/strong><\/td>\r\nTotal Liabilities and Stockholders\u2019 Equity <\/strong><\/td>\r\n$35,570 <\/strong><\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<\/section>
      \u00a0<\/section>
      Comprehensive Problem 1.<\/strong><\/section>
      Cast 77 Service Company has the following account balances: Cash, $6,000; Accounts Receivable, $7,000; Prepaid Rent, 1,900; Prepaid Insurance, $1,200 \u00a0Supplies, $950; Equipment, $7,000; Trucks, $10,000; Accounts Payable, $2,700; Common Stock $25,000; Retained Earnings $6,350. Business transactions during December are presented as follows:<\/section>\r\n
        \r\n\t
      1. Company received cash from clients for services, $7,500<\/li>\r\n\t
      2. Cast 77 paid to creditors $600,<\/li>\r\n\t
      3. Paid office rent for the month of December, $950,<\/li>\r\n\t
      4. Company billed client for accounting services on account, $8,200<\/li>\r\n\t
      5. Supplies were purchased on account, $450,<\/li>\r\n\t
      6. Company received cash from clients billed previously, $4,200<\/li>\r\n\t
      7. Cast 77 received an invoice for services from Copy Plus for December (the invoice will be paid next month), $550,<\/li>\r\n\t
      8. Cast 77 paid monthly salaries, $4,700,<\/li>\r\n\t
      9. Utilities expense were paid, $380,<\/li>\r\n\t
      10. Miscellaneous expense were paid, $250,<\/li>\r\n\t
      11. Paid for monthly insurance, $200<\/li>\r\n\t
      12. Dividends were paid, $750.<\/li>\r\n<\/ol>\r\n
        Required:<\/strong><\/section>\r\n
          \r\n\t
        • Apply the basic accounting equation (create a spreadsheet, please see comprehensive example) to complete a transaction analysis for each transaction (hint:\u00a0\u00a0enter the balances provided first<\/em>).<\/li>\r\n\t
        • Prepare income statement at the end of December 31.<\/li>\r\n\t
        • Prepare statement of retained earnings equity at the end of December 31.<\/li>\r\n\t
        • Prepare balance sheet at the end of December 31.<\/li>\r\n<\/ul>\r\n<\/div>","rendered":"

          \u00a0SHORT ANSWER QUESTIONS, EXERCISES AND PROBLEMS<\/h3>\n
          \n

          Questions:<\/strong><\/p>\n

          \u27a2\u00a0 Accounting has often been called the language of business. In what respects would you agree with this description? How might you argue that this description is deficient?<\/p>\n

          \u27a2\u00a0 Define asset, liability, and stockholders\u2019 equity.<\/p>\n

          \u27a2\u00a0 How do liabilities and stockholders\u2019 equity differ? How are they similar?<\/p>\n

          \u27a2\u00a0 How do accounts payable and notes payable differ? How are they similar?<\/p>\n

          \u27a2\u00a0 Define revenues. How are revenues measured?<\/p>\n

          \u27a2\u00a0 Define expenses. How are expenses measured?<\/p>\n

          \u27a2\u00a0 What is a balance sheet? On what aspect of a business does the balance sheet provide information?<\/p>\n

          \u27a2\u00a0 What is an income statement? On what aspect of a business does this statement provide information?<\/p>\n

          \u27a2\u00a0 What information does the statement of retained earnings provide?<\/p>\n

          \u27a2\u00a0 Identify the three types of activities shown in a statement of cash flows.<\/p>\n

          \u27a2\u00a0 What is a transaction? What use does the accountant make of transactions? Why?<\/p>\n

          \u27a2\u00a0 What is the accounting equation? Why must it always balance?<\/p>\n

          \u27a2\u00a0 Give an example from your personal life that illustrates your use of accounting information in reaching a decision.<\/p>\n

          \u27a2\u00a0 You have been elected to the governing board of your church. At the first meeting you attend, mention is made of building a new church. What accounting information would the board need in deciding whether or not to go ahead?<\/p>\n

          \u27a2\u00a0 A company purchased equipment for $ 2,000 cash. The vendor stated that the equipment was worth $ 2,400. At what amount should the equipment be recorded?<\/p>\n

          \u27a2\u00a0 What is meant by money measurement?<\/p>\n

          \u27a2\u00a0 Of what significance is the exchange-price (or cost) concept? How is the cost to acquire an asset determined?<\/p>\n

          \u27a2\u00a0 What effect does the going-concern (continuity) concept have on the amounts at which long-term assets are carried on the balance sheet?<\/p>\n

          \u27a2\u00a0 Of what importance is the periodicity (time periods) concept to the preparation of financial statements?<\/p>\n

          \u27a2\u00a0 Describe a transaction that would:<\/p>\n

            \n
          • Increase both an asset and capital stock.<\/li>\n
          • Increase both an asset and a liability.<\/li>\n
          • Increase one asset and decrease another asset.<\/li>\n
          • Decrease both a liability and an asset.<\/li>\n
          • Increase both an asset and retained earnings.<\/li>\n
          • Decrease both an asset and retained earnings.<\/li>\n
          • Increase a liability and decrease retained earnings.<\/li>\n
          • Decrease both an asset and\u00a0retained earnings.<\/li>\n
          • Identify the causes of increases and decreases in stockholders\u2019 equity<\/li>\n<\/ul>\n

            B) Accounting Exercises:<\/strong><\/p>\n

            Exercise 1. Applying Basic Accounting Equation<\/strong><\/p>\n

            Royals Palm, Inc. reports the following assets and liabilities. Compute the totals that would appear in the corporation\u2019s basic accounting equation (Assets = Liabilities + Stockholders\u2019 Equity (Capital Stock)).<\/p>\n

             <\/p>\n

            Cash\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.$55,000<\/p>\n

            Accounts Payable\u2026\u2026\u2026\u2026\u202625,000<\/p>\n

            Office Supplies\u2026\u2026\u2026\u2026\u2026\u2026. 1, 500<\/p>\n

            Loan Payable\u2026\u2026\u2026\u2026\u2026\u2026\u2026..7,000<\/p>\n

            Accounts Receivable\u2026\u2026\u2026….10,000<\/p>\n

            Answer:<\/strong><\/p>\n\n\n\n\n
            Assets<\/td>\n= Liabilities<\/td>\n+ Stockholders\u2019 Equity<\/td>\n<\/tr>\n
            \n

             <\/p>\n

             <\/td>\n

            		<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

             <\/p>\n

            Exercise 2. Applying Basic Accounting Equation<\/strong><\/p>\n

            Dan and Den, Inc. reports the following assets and liabilities. Compute the totals that would appear in the corporation\u2019s basic accounting equation (Assets = Liabilities + Stockholders\u2019 Equity (Capital Stock)).<\/p>\n

             <\/p>\n

            Cash\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.$37,000<\/p>\n

            Accounts Payable\u2026\u2026\u2026\u2026\u202615,000<\/p>\n

            Supplies\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026.1, 800<\/p>\n

            Loan Payable\u2026\u2026\u2026\u2026\u2026\u2026\u2026..9,000<\/p>\n

            Inventory\u2026\u2026\u2026\u2026\u2026\u2026\u2026\u2026….12,000<\/p>\n

             <\/p>\n

            Answer:<\/strong><\/p>\n\n\n\n\n
            Assets<\/td>\n= Liabilities<\/td>\n+ Stockholders\u2019 Equity<\/td>\n<\/tr>\n
            \n

             <\/p>\n

             <\/td>\n

            		<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

             <\/p>\n

            Exercise 3. <\/strong>Complete missing amounts in fundamental accounting equation for several businesses:<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n
            Assets<\/td>\n= Liabilities<\/td>\n+ Stockholders\u2019 Equity<\/td>\n<\/tr>\n
            578,000<\/td>\n<\/td>\n152,000<\/td>\n<\/tr>\n
            <\/td>\n25,000<\/td>\n180,500<\/td>\n<\/tr>\n
            127,000<\/td>\n17,000<\/td>\n<\/td>\n<\/tr>\n
            269,000<\/td>\n\u00a045,000<\/td>\n<\/td>\n<\/tr>\n
            850,000<\/td>\n<\/td>\n\u00a0675,000<\/td>\n<\/tr>\n
            <\/td>\n\u00a0250,000<\/td>\n\u00a0657,450<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

             <\/p>\n

            Exercise 4.\u00a0\u00a0Perez Company had the following transactions during January:<\/strong><\/p>\n

            1.\u00a0 Jan 1\u00a0 Issued $100,000 in stock to owners in exchange for cash to start the business.<\/p>\n

            2.\u00a0 Jan 5\u00a0 Borrowed $50,000 from the bank by signing a notes payable.<\/p>\n

            3.\u00a0 Jan 10\u00a0 Purchase equipment by paying cash for $25,000.<\/p>\n

            3.\u00a0 Jan 15\u00a0 Paid January rent of $2,400\u00a0for the office space (hint:\u00a0 since this is for January, record as rent expense<\/em>)<\/p>\n

            4.\u00a0 Jan 18 Performed services for customers and received cash immediately for $8,000.<\/p>\n

            5.\u00a0 Jan 20\u00a0 Purchased $2,000 in supplies on account.<\/p>\n

            Prepare a transaction analysis for the January transactions.\u00a0 Remember to prove the accounting equation at the end.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n
            <\/td>\nAssets\u00a0<\/strong>\u00a0<\/strong>\u00a0=<\/strong><\/td>\nLiability<\/strong>\u00a0<\/strong><\/td>\n+ Equity<\/strong><\/td>\n + Revenue<\/strong><\/td>\n– Expense<\/strong><\/td>\n<\/tr>\n
            Transaction<\/em><\/td>\nCash<\/td>\nSupplies<\/td>\nEquipment<\/td>\nAccounts Payable<\/td>\nNotes Payable<\/td>\nCommon Stock<\/td>\nService Revenue<\/td>\nRent Expense<\/td>\n<\/tr>\n
            Jan 1 Issued stock to owners<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Jan 5 Borrowed money from bank<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Jan 10 Purchased equipment with cash<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Jan 15 Paid January rent<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Jan 18 Performed services<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Jan 20 Purchased supplies on account<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            Balance:<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

             <\/p>\n

            Exercise 5. \u00a0On\u00a0December 31, Bryniuk\u2019s Company, the accounting records showed the following information:<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
            Cash<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a049,500<\/td>\n<\/tr>\n
            Accounts Receivable<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 125,000<\/td>\n<\/tr>\n
            Supplies<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,500<\/td>\n<\/tr>\n
            Prepaid Insurance<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 12,000<\/td>\n<\/tr>\n
            Equipment<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 70,000<\/td>\n<\/tr>\n
            Building<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0420,000<\/td>\n<\/tr>\n
            Land<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 111,500<\/td>\n<\/tr>\n
            Accounts Payable<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 80,000<\/td>\n<\/tr>\n
            Notes Payable<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 170,000<\/td>\n<\/tr>\n
            Common Stock<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 410,000<\/td>\n<\/tr>\n
            Retained Earnings<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a065,000<\/td>\n<\/tr>\n
            Dividends<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 20,000<\/td>\n<\/tr>\n
            Service Revenue<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 174,000<\/td>\n<\/tr>\n
            Interest Revenue<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,000<\/td>\n<\/tr>\n
            Salaries Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 52,000<\/td>\n<\/tr>\n
            Advertising Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 17,000<\/td>\n<\/tr>\n
            Insurance Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 5,000<\/td>\n<\/tr>\n
            Utilities Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13,750<\/td>\n<\/tr>\n
            Interest Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 2,750<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            Prepare the Income Statement for year ended December 31.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
            Bryniuk’s Company<\/strong><\/td>\n<\/tr>\n
            Income Statement<\/strong><\/td>\n<\/tr>\n
            For Year Ended December 31<\/strong><\/td>\n<\/tr>\n
            Revenues:<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 .<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            Total Revenues<\/em><\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            Expenses:<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            Total Expenses<\/em><\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            Net Income<\/strong><\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            Exercise 6.\u00a0\u00a0Using the information from Exercise 5, prepare the Statement of Retained Earnings for December 31.<\/strong><\/p>\n

            \u00a0<\/section>\n
            \n\n\n\n\n\n\n\n\n\n\n\n
            Bryniuk’s Company<\/strong><\/td>\n<\/tr>\n
            Statement of Retained Earnings<\/strong><\/td>\n<\/tr>\n
            For Year Ended December 31<\/strong><\/td>\n<\/tr>\n
            Beginning Retained Earnings<\/td>\n\u00a0\u00a0 $65,000<\/td>\n<\/tr>\n
            Add:\u00a0 Net Income<\/td>\n<\/td>\n<\/tr>\n
            <\/td>\n<\/td>\n<\/tr>\n
            Subtract: Dividends<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/tr>\n
            Ending Retained Earnings\u00a0\u00a0 <\/strong><\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            Exercise 7.\u00a0 Using the information from Exercises 5 and 6, prepare the Balance Sheet for December 31.<\/strong><\/strong><\/p>\n<\/section>\n

            \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
            Bryniuk’s Company<\/strong><\/td>\n<\/tr>\n
            Balance Sheet<\/strong><\/td>\n<\/tr>\n
            December 31<\/strong><\/td>\n<\/tr>\n
            Assets<\/em><\/td>\n\u00a0<\/em><\/td>\nLiabilities and Equity<\/em><\/td>\n\u00a0<\/em><\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\nTotal Liabilities<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            \u00a0<\/strong><\/td>\n<\/td>\nTotal Equity<\/td>\n<\/td>\n<\/tr>\n
            Total Assets<\/strong><\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0<\/strong><\/td>\nTotal Liabilities and Equity<\/strong><\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            Problem 1:\u00a0 Prepare the financial statements of RodCast Company\u00a0using the following information:<\/strong><\/p>\n<\/section>\n

            \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
            Accounts Payable<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 43,100.00<\/td>\n<\/tr>\n
            Accounts Receivable<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 85,000.00<\/td>\n<\/tr>\n
            Cash<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 55,320.00<\/td>\n<\/tr>\n
            Common Stock<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 125,000.00<\/td>\n<\/tr>\n
            Dividends<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 28,000.00<\/td>\n<\/tr>\n
            Machinery<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 70,000.00<\/td>\n<\/tr>\n
            Rent Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 24,000.00<\/td>\n<\/tr>\n
            Retained Earnings<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 70,000.00<\/td>\n<\/tr>\n
            Salaries Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 65,000.00<\/td>\n<\/tr>\n
            Service Revenue<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 165,320.00<\/td>\n<\/tr>\n
            Supplies<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 \u00a0 \u00a0 2,350.00<\/td>\n<\/tr>\n
            Trucks<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 60,000.00<\/td>\n<\/tr>\n
            Utilities Expense<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 13,750.00<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            1.\u00a0 Classify each account\u00a0by Account Type (Asset, Liability, Equity, Revenue or Expense)\u00a0and which financial statement (income statement, statement of retained earnings, or balance sheet) it appears on.<\/p>\n<\/section>\n

            \n\n\n\n\n\n
            Account\u00a0\u00a0 <\/strong><\/td>\nAccount Type\u00a0 <\/strong><\/td>\nFinancial Statement\u00a0 <\/strong><\/td>\n<\/tr>\n
            <\/td>\n<\/td>\n<\/td>\n<\/tr>\n
            <\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

            2.\u00a0 Prepare the Income Statement, Statement of Retained Earnings and Balance Sheet for the month ended October 31.<\/p>\n<\/section>\n

            Comprehensive Problems Example:<\/strong><\/p>\n

            Larson\u2019s Accounting Company has the following account balances: Cash, $5,000; Accounts Receivable, $2,000; Prepaid Rent $1,500; Supplies, $850; Equipment, $6,000; Trucks, $15,000; Accounts Payable, $2,500; Common Stock, $20,000; Retained Earnings $7,850. Business transactions during December are presented as follows:<\/section>\n
              \n
            1. Company received cash from clients for services, $4,500<\/li>\n
            2. Larson paid to creditors $500,<\/li>\n
            3. Paid office rent for the month of December, $750,<\/li>\n
            4. Company billed client for accounting services on account, $5,200<\/li>\n
            5. Supplies were purchased on account, $650,<\/li>\n
            6. Company received cash from clients billed previously, $6,000<\/li>\n
            7. Larson received an invoice for office equipment repair services from Office Extra for December (the invoice will be paid next month), $850,<\/li>\n
            8. Larson paid monthly salaries, $2,700,<\/li>\n
            9. Utilities expense were paid, $280,<\/li>\n
            10. Miscellaneous expense were paid, $350,<\/li>\n
            11. Dividends were paid, $550.<\/li>\n<\/ol>\n
              \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
              <\/td>\nAssets\u00a0<\/strong>\u00a0\u00a0\u00a0=<\/td>\n\u00a0Liabilities<\/strong><\/td>\n\u00a0+ Stockholders\u2019 Equity <\/strong><\/td>\n\u00a0+ Net Income<\/strong>\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n<\/tr>\n
              <\/td>\nCash <\/strong><\/td>\nAccounts Receivable<\/strong><\/td>\nPrepaid Rent<\/strong><\/td>\nSupplies <\/strong><\/td>\nEquipment <\/strong><\/td>\nTrucks<\/strong><\/td>\nAccounts Payable <\/strong><\/td>\nCommon Stock <\/strong><\/td>\n+ Retained Earnings<\/strong><\/td>\n– Dividends<\/strong><\/td>\nRevenue<\/strong><\/td>\n\u00a0– Expenses <\/strong><\/td>\nExpense Type<\/td>\n<\/tr>\n
              Previous Balances<\/td>\n$5,000<\/td>\n$2,000<\/td>\n$1,500<\/td>\n$850<\/td>\n$6,000<\/td>\n$15,000<\/td>\n$2,500<\/td>\n$20,000<\/td>\n$7,850<\/td>\n<\/td>\n<\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n<\/tr>\n
              1<\/td>\n4,500<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n4,500<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              2<\/td>\n-500<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n-500<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              3<\/td>\n<\/td>\n<\/td>\n-750<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n750<\/td>\nRent expense<\/td>\n<\/tr>\n
              4<\/td>\n<\/td>\n5,200<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n5,200<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              5<\/td>\n<\/td>\n<\/td>\n<\/td>\n650<\/td>\n<\/td>\n<\/td>\n650<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              6<\/td>\n6,000<\/td>\n-6,000<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              7<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n850<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n850<\/td>\nRepair expense<\/td>\n<\/tr>\n
              8<\/td>\n-2,700<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n2,700<\/td>\nSalary expense<\/td>\n<\/tr>\n
              9<\/td>\n-280<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n280<\/td>\nUtilities expense<\/td>\n<\/tr>\n
              10<\/td>\n-350<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n350<\/td>\nMisc. expense<\/td>\n<\/tr>\n
              11<\/td>\n-550<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n550<\/td>\n<\/td>\n\u00a0<\/strong><\/td>\n\u00a0<\/strong><\/td>\n<\/tr>\n
              Ending Balance: <\/strong><\/td>\n$11,120 <\/strong><\/td>\n$1,200 <\/strong><\/td>\n$750 <\/strong><\/td>\n$1,500 <\/strong><\/td>\n$6,000 <\/strong><\/td>\n$15,000 <\/strong><\/td>\n$3,500 <\/strong><\/td>\n$20,000 <\/strong><\/td>\n$7,850 <\/strong><\/td>\n$550 <\/strong><\/td>\n$9,700 <\/strong><\/td>\n$4,930 <\/strong><\/td>\n\u00a0<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/section>\n
              \u00a0<\/strong><\/section>\n
              Larson Company<\/strong><\/section>\n
              Income Statement<\/strong><\/section>\n
              Month Ended December 31, 2014<\/strong><\/section>\n
              \n\n\n\n\n\n\n\n\n\n\n\n
              Fees earned<\/td>\n<\/td>\n$9,700<\/td>\n<\/tr>\n
              Expenses:<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              Rent Expense<\/td>\n$750<\/td>\n<\/td>\n<\/tr>\n
              Repair Expense<\/td>\n850<\/td>\n<\/td>\n<\/tr>\n
              Wages Expense<\/td>\n2700<\/td>\n<\/td>\n<\/tr>\n
              Utilities Expense<\/td>\n280<\/td>\n<\/td>\n<\/tr>\n
              Miscellaneous expense<\/td>\n350<\/td>\n<\/td>\n<\/tr>\n
              Total Expenses<\/td>\n<\/td>\n$4,930<\/td>\n<\/tr>\n
              Net Income \u00a0($9,700 – $4,930)=<\/td>\n<\/td>\n$4,770<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/section>\n
              \u00a0<\/strong><\/section>\n
              Larson Company<\/strong><\/section>\n
              Statement of Retained Earnings<\/strong><\/section>\n
              Month Ended December 31<\/strong><\/section>\n
              \n\n\n\n\n\n\n\n
              Larson Inc., Retained Earnings, December 31<\/strong><\/td>\n<\/td>\n$ 7,850<\/td>\n<\/tr>\n
              Net income for the month<\/td>\n$4,770<\/td>\n<\/td>\n<\/tr>\n
              Less Dividends<\/td>\n– 550<\/td>\n<\/td>\n<\/tr>\n
              Increase in Stockholders\u2019 Equity<\/td>\n<\/td>\n+ 4,220<\/td>\n<\/tr>\n
              Larson Inc., Retained Earnings, December 31<\/strong><\/td>\n<\/td>\n$12,070<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/section>\n
              \u00a0<\/section>\n
              \n\n\n\n\n\n\n\n\n\n\n\n\n\n
              Larson Company<\/strong><\/td>\n<\/tr>\n
              Balance Sheet<\/strong><\/td>\n<\/tr>\n
              Month Ended December 31<\/strong><\/td>\n<\/tr>\n
              Assets<\/strong><\/td>\n<\/td>\nLiabilities<\/strong><\/td>\n<\/td>\n<\/tr>\n
              Cash<\/td>\n$11,120<\/td>\nAccounts Payable<\/td>\n$3,500<\/td>\n<\/tr>\n
              Accounts Receivable<\/td>\n\u00a0\u00a0 1,200<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              Prepaid Rent<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 750<\/td>\nStockholders\u2019 Equity<\/strong><\/td>\n<\/td>\n<\/tr>\n
              Supplies<\/td>\n\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 1,500<\/td>\nCommon Stock<\/td>\n20,000<\/td>\n<\/tr>\n
              Equipment<\/td>\n\u00a0\u00a0\u00a0 6,000<\/td>\n\u00a0Retained Earnings<\/td>\n\u00a012,070<\/td>\n<\/tr>\n
              Trucks<\/td>\n\u00a0\u00a0\u00a0 15,000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              Total Assets<\/strong><\/td>\n$35,570\u00a0\u00a0 \u00a0<\/strong><\/td>\nTotal Liabilities and Stockholders\u2019 Equity <\/strong><\/td>\n$35,570 <\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/section>\n
              \u00a0<\/section>\n
              Comprehensive Problem 1.<\/strong><\/section>\n
              Cast 77 Service Company has the following account balances: Cash, $6,000; Accounts Receivable, $7,000; Prepaid Rent, 1,900; Prepaid Insurance, $1,200 \u00a0Supplies, $950; Equipment, $7,000; Trucks, $10,000; Accounts Payable, $2,700; Common Stock $25,000; Retained Earnings $6,350. Business transactions during December are presented as follows:<\/section>\n
                \n
              1. Company received cash from clients for services, $7,500<\/li>\n
              2. Cast 77 paid to creditors $600,<\/li>\n
              3. Paid office rent for the month of December, $950,<\/li>\n
              4. Company billed client for accounting services on account, $8,200<\/li>\n
              5. Supplies were purchased on account, $450,<\/li>\n
              6. Company received cash from clients billed previously, $4,200<\/li>\n
              7. Cast 77 received an invoice for services from Copy Plus for December (the invoice will be paid next month), $550,<\/li>\n
              8. Cast 77 paid monthly salaries, $4,700,<\/li>\n
              9. Utilities expense were paid, $380,<\/li>\n
              10. Miscellaneous expense were paid, $250,<\/li>\n
              11. Paid for monthly insurance, $200<\/li>\n
              12. Dividends were paid, $750.<\/li>\n<\/ol>\n
                Required:<\/strong><\/section>\n