Question

Part VIII: Identifying Account Balances Account Name Balance Type of Account Financial Statement Normal Balance (debit/credit) 8,500 12 500 Asser Balance Sheet Dehir a) Accounts Payable b) Accounts Receivable c) Beginning Balance Retained Earnings d) Cash c) Common Stock f) Dividends g) Equipment h) Land i) Notes Payable j) Prepaid Rent k) Salaries Expense 1) Service Revenue m) Supplies n) Supplies Expense o) Utilities Expense 16,500 25,000 12.000 45,000 32,000 12.000 1.200 Expense Income Statement Debir 50,000 125,000 1.800 4,000 12.000 1. Classify each of the above accounts as Asset, Liability, Stockholder's Equity, Revenue, or Expense. 2. Identify the normal balance of each account as either Debitor Credit. 3. Identify the financial statement on which each account would first appear. 4. Calculate the following amounts: a. Total Assets: b. Total Liabilities: c. Total Equity d. Net Income: e. Beginning Balance Retained Earnings: f. Ending Balance Retained Earnings: 5. If you prepared a trial balance using the above information: a. What are total debits? b. What are total credits? 6. What would the closing entries look like for this problem?

Answer 1

Ans. 1,2& 3	Account Name	Balance	Type of account	Financial statement	Normal balance (debit/credit)
	Accounts payable	$8,500	Liability	Balance sheet	Credit
	Accounts receivable	$12,500	Asset	Balance sheet	Debit
	Beginning retained earnings		Equity	Balance sheet	Credit
	Cash	$16,500	Asset	Balance sheet	Debit
	Common stock	$25,000	Equity	Balance sheet	Credit
	Dividends	$12,000	Equity	Balance sheet	Credit
	Equipment	$45,000	Asset	Balance sheet	Debit
	Land	$32,000	Asset	Balance sheet	Debit
	Notes payable	$12,000	Liability	Balance sheet	Credit
	Prepaid rent	$1,200	Asset	Balance sheet	Debit
	Salaries expense	$50,000	Expenses	Income statement	Debit
	Service revenue	$125,000	Revenue	Income statement	Credit
	Supplies	$1,800	Asset	Balance sheet	Debit
	Supplies expense	$4,000	Expenses	Income statement	Debit
	Utilities expense	$12,000	Expenses	Income statement	Debit
Ans. 4 a	Assets:
	Cash	$16,500
	Accounts receivables	$12,500
	Supplies	$1,800
	Prepaid rent	$1,200
	Equipment	$45,000
	Land	$32,000
	Total Assets	$109,000
Ans. 4 b	Liabilities:
	Current Liabilities:
	Accounts payable	$8,500
	Notes payable	$12,000
	Total Liabilities	$20,500
Ans. 4 c	Total Assets	$109,000
	Less: Total Liabilities	-$20,500
	Total equity	$88,500
Ans. 4 d
	Income Statement
	Particulars	Amount	Amount
	Revenues:
	Service revenue	$125,000
	Total revenue (a)		$125,000
	Less: Expenses:
	Salaries expense	$50,000
	Supplies expense	$4,000
	Utilities expense	$12,000
	Total expenses (b)		$66,000
	Net Income (a - b)		$59,000
Ans. 4 e	To calculate beginning balance of retained eanrings, we need to first calculate the
	ending balance of retained earnings.
	Total equity	$88,500
	Less: Common stock	-$25,000
	Ending balance of retained earnings	$63,500
	Particulars	Amount
	Ending balance of Retained earnings	$63,500
	Less: Net income	-$59,000
	Add: Dividends	$12,000
	Beginning balance of Retained earnings	$16,500
Ans. 4 f	Ending balance of retained earnings	$63,500	(calculated as above)