Question

Consider the following situations for Shocker: a. On November 28, 2018, Shocker receives a $1.650 payment from a customer for services to be rendered evenly over the next three months. Deferred Revenue is credited. b. On December 1, 2018, the company pays a local radio station $2.130 for 30 radio ads that were to be aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited. c. Employee salaries for the month of December totaling $6,100 will be paid on January 7, 2016. d. On August 31, 2018, Shocker borrows $51,000 from a local bank. A note is signed with principal and 9% interest to be paid on August 31, 2019 Required: Indicate by how much the assets, liabilities, and stockholders' equity in the December 31, 2018, balance sheet is higher or lower if the adjustment is not recorded. (If none of the categories apply for a particular item, leave the cell blank.) - Liabilities - Stockholders' Equity Assets I a b. Total

Answer 1

	Assets		Liabilities		Stockholders' Equity
a			550	higher	550	lower
b	710	higher			710	higher
c			6100	lower	6100	higher
d			1530	lower	1530	higher
Total	710	higher	7080	lower	7790	higher
Workings:
a	550	=1650/3
b	710	=2130*10/30
d	1530	=51000*9%*4/12