Cash Non Cash Assets -Contra Asset = Liabilities Contributed Capital Earned Capital Revenue -Expenses =Net Income

Account Name $ Amount Account Name $ Amount Account Name $ Amount Account Name $ Amount Account Name $ Amount Account Name $ Amount Account Name $ Amount Account Name $ Amount $ Amount

Q3-9

Q3-10
Prepaid insurance was debited w 2 yr premium of $1872
(1872/2-936 /12 =78) Prepaid Insurance -78 RE -78 Insurance Exp 78 -78

Q3-11

A contra account are used to record reductions in or offsets against a related account. The accumulated Depreciation account normally has a credit balance and appears in the balance sheet as a deduction from the related asset amount

Q3-13

a. paid $9,720 for 2 year subscription Cash 9720 Acct Receivable 9720
b. end of Jan (one month passed) (9720 / 2 = 4860, Subscription
4860/12 =405 Liability -405 RE 405 Sub Received 405 405

Q3-14

Wages Payable 190 RE -190 Wage Exp 190 -190

Prepaid Insurance

Unearned Rent
M3-24 Prepaid Insurance 6660 Liability 5250 Rent Revenue 15000 Salaries Exp 3100

Supplies inventory 1930

Office Equipment 5952

1. Prepaid Insurance represents a three year premium
paid on Jan 1, 2019 (6660/3=2220, 2220/12=185) 1
month has passed Prepaid Insurance -185 RE -185 Insurance Exp 185 -185

2. Supplies of 850 were still available (1930-850 = 1080) Supplies inventory -1080 RE -1080 Supplies Exp 1080 -1080

3. Office Equipment is expected to last 8 years Depreciation

(5952/8=744, 744/12=62. So one month has passed -Accumulated Depreciation 62 RE -62 Exp. 62 -62
Unearned Rent
4. Tenant paid rent for one month Liability -875 RE 875 Rent Revenue 875 875

5. accrued employee salaries of $490 Wage Payable 490 RE -490 Wage Exp 490 -490

Prepaid Insurance 6475 Wages Payable 490 RE -942 Rent Revenue 15000 Wage Exp 3590
Unearned Rent
Supplies Inventory 850 Liability 4375 Insurance Exp 185

Office Equipment 5890 Supplies Exp 1080

P3-35

Performance
Obligation Refinishing
Prepaid Rent 5700 Liability 600 Fees Rev. 2500
Prepaid Adv 630
Supplies Inv 3000

1. Firm paid one year's advance rent of $5700 in cash (one

month has passed. 5700/12=475/month) Prepaid Rent -475 RE -475 Rent Exp 475 -475
2. Adv was prepaid for July, Aug, Sept (3 months)
630/3=210 one month has passed Prepaid Adv -210 RE -210 Adv Exp 210 -210
3. Supplies still avail is $1100 (3000-1100=1900) Supplies Inv -1900 RE -1900 Supplies Exp 1900 -1900

4. service performed but not billed to customers Fees Receivable 800 RE 800 Svc Rev 800 800
Performance
5. Paid $600 in advance for a refinishing project. Half Obligation Refinishing
completed now Liability -300 RE 300 Fees Rev 300 300
Totals 0 -1785 -300 -1485 1100 2585 -1485
-1485

E3-39 Solomon Corporation

Balance Sheet
31-Dec-18
Assets Liabilities
Cash 4000 Notes Payable 10000
Account Receiveable 6500 Equities
Equipment 78000 Common Stock 43000
Accumulated Depreciation -14000 Retained Earnings 12600
Net Equipment 64000 Dividends 8000
Total Assets 74500 Total Liabilities & Equities 73600

Solomon Corporation
Income Statement
For year Ended December 31, 2018
Service Fee Revenue 71000
Rent expense -18000
Salaries expense -37100
Depreciation expense -7000
8900

P3-53 Cash 8500 Inventories 12000 Accounts Payable 5200

Prepaid Rent 3800 Wages payable 100 RE 23500
Accumulated Depreciation
Equipment 7500 Account -3000

1. Sales total $145,850 cash sales Cash 145850 RE 145850 Sales Rev 145850 145850

2 purchases 76200 in inventory on account Inventory 76200 Account Payable 76200

2.a inventory totals $14500 (12000+76200-14500 =73700) Inventory -73700 RE -73700 COGS 73700 -73700

3. Accounts payable totals $4100 Cash -77300 Accounts Payable -77300

4. annual store rent paid Cash -24000 Prepaid Rent 24000

Prepaid Rent -23800 RE -23800 Rent Expense 23800 -23800

5