Chapter 4 Demonstration Problems Completing the Accounting Cycle Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-1

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-2 The unadjusted trial balance of Elliot Wilson at December 31, 2014, and the data for the adjustments follow: P4-30D

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-3 P4-30D ELLIOT WILSON Unadjusted Trial Balance December 31, 2014 Account TitleBalance DebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 5,000 Office Supplies 3,000 Equipment 42,000 Accumulated Depreciation—Equipment $6,500 Accounts Payable 15,000 Salaries Payable Unearned Revenue 12,000 Common Stock 30,000 Retained Earnings10,000 Dividends 7,100 Service Revenue 27,100 Salaries Expense 5,500 Rent Expense Depreciation Expense—Equipment Supplies Expense Total $100,600

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-4 P4-30D Adjustment Data: a.Unearned Revenue still unearned at December 31, $4,000. b.Prepaid Rent still in force at December 31, $3,000. c.Office Supplies used, $2,000. d.Depreciation, $500. e.Accrued Salaries Expense at December 31, $900.

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-5 P4-30D Requirements 1.Open the T-accounts using the balances in the unadjusted trial balance. 2.Prepare the adjusting entries and post to the accounts. 3.Prepare an adjusted trial balance. 4.Complete the worksheet for the year ended December 31, Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. 6.Prepare the closing entries and post to the accounts. 7.Prepare a post-closing trial balance. 8.Calculate the current ratio for the company.

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-6 P4-30D—Req. 1 Cash Bal.18,000 Accounts Receivable Bal.20,000 Prepaid Rent Bal.5,000 Office Supplies Bal.3,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-7 Equipment Bal.42,000 Accumulated Depreciation—Equip 6,500Bal. Accounts Payable 15,000Bal. Salaries Payable 0Bal. P4-30D—Req. 1

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-8 Unearned Revenue 12,000Bal. Common Stock 30,000Bal. Retained Earnings 10,000Bal. Dividends Bal.7,100 P4-30D—Req. 1

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-9 Income Summary Service Revenue 27,100Bal. Salaries Expense Bal.5,500 Rent Expense Bal.0 P4-30D—Req. 1

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-10 Depreciation Expense—Equip Bal.0 Supplies Expense Bal.0 P4-30D—Req. 1

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-11 a. Unearned Revenue still unearned at December 31, $4,000. DateAccounts and ExplanationDebitCredit Dec. 31 Unearned Revenue8,000 Service Revenue 8,000 To adjust revenue earned. Unearned Revenue 12,000Bal. Adj.8,000 Service Revenue 27,100Bal. 8,000Adj. 35,100Bal. P4-30D—Req. 2

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-12 b. Prepaid Rent still in force at December 31, $3,000. DateAccounts and ExplanationDebitCredit Dec. 31 Rent Expense2,000 Prepaid Rent 2,000 To adjust rent expense. Rent Expense Bal.0 Adj.2,000 Bal.2,000 Prepaid Rent Bal.5,0002,000Adj. Bal.3,000 P4-30D—Req. 2

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-13 c. Office Supplies used, $2,000. DateAccounts and ExplanationDebitCredit Dec. 31 Supplies Expense2,000 Office Supplies 2,000 To adjust office supplies. Supplies Expense Bal.0 Adj.2,000 Bal.2,000 Office Supplies Bal.3,0002,000Adj. Bal.1,000 P4-30D—Req. 2

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-14 d. Depreciation, $500. DateAccounts and ExplanationDebitCredit Dec. 31 Depreciation Expense—Equipment500 Accumulated Depreciation— Equipment 500 To adjust depreciation. Depreciation Expense—Equip. Bal.0 Adj.500 Bal.500 Accumulated Depreciation—Equip 6,500Bal. 500Adj. 7,000Bal. P4-30D—Req. 2

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-15 e. Accrued Salaries Expense at December 31, $900. DateAccounts and ExplanationDebitCredit Dec. 31 Salaries Expense900 Salaries Payable 900 To adjust accrued salaries. Salaries Expense Bal.5,500 Adj.900 Bal.6,400 Salaries Payable 0Bal. 900Adj. 900Bal. P4-30D—Req. 2

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-16 ELLIOT WILSON Adjusted Trial Balance December 31, 2014 Account TitleBalance DebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 3,000 Office Supplies 1,000 Equipment 42,000 Accumulated Depreciation—Equipment $ 7,000 Accounts Payable 15,000 Salaries Payable 900 Unearned Revenue 4,000 Common Stock 30,000 Retained Earnings10,000 Dividends 7,100 Service Revenue 35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000 Total $102,000 P4-30D—Req. 3

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-17 P4-30D—Req. 4 ELLIOT WILSON Worksheet December 31, 2014 Account Names Unadjusted Trial BalanceAdjustments Adjusted Trial Balance DebitCreditDebitCreditDebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 5,000 $2,0003,000 Office Supplies 3,000 2,0001,000 Equipment 42,000 Acc. Depreciation $6, $7,000 Accounts Payable 15,000 Salaries Payable Unearned Revenue 12,000$8,000 4,000 Common Stock 30,000 Retained Earnings 10,000 Dividends 7,100 Service Revenue 27,100 8,000 35,100 Salaries Expense 5, ,400 Rent Expense 0 2,000 Dep. Expense Supplies Expense 0 2,000 Total $100,600 $13,400 $102,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-18 P4-30D—Req. 4 ELLIOT WILSON Worksheet December 31, 2014 Account Names Unadjusted Trial BalanceAdjustments Adjusted Trial BalanceIncome Statement DebitCreditDebitCreditDebitCreditDebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 5,000 $2,0003,000 Office Supplies 3,000 2,0001,000 Equipment 42,000 Acc. Depreciation $6, $7,000 Accounts Payable 15,000 Salaries Payable Unearned Revenue 12,000$8,000 4,000 Common Stock 30,000 Retained Earnings 10,000 Dividends 7,100 Service Revenue 27,100 8,000 35,100$35,100 Salaries Expense 5, ,400 $6,400 Rent Expense 0 2,000 Dep. Expense Supplies Expense 0 2,000 Total $100,600 $13,400 $102,000 $10,900$35,100 Net Income 24,200 Total $35,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-19 P4-30D—Req. 4 ELLIOT WILSON Worksheet December 31, 2014 Account Names Unadjusted Trial BalanceAdjustments Adjusted Trial BalanceIncome StatementBalance Sheet DebitCreditDebitCreditDebitCreditDebitCreditDebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 5,000 $2,0003,000 Office Supplies 3,000 2,0001,000 Equipment 42,000 Acc. Depreciation $6, $7,000 Accounts Payable 15,000 Salaries Payable Unearned Revenue 12,000$8,000 4,000 Common Stock 30,000 Retained Earnings 10,000 Dividends 7,100 Service Revenue 27,100 8,000 35,100$35,100 Salaries Expense 5, ,400 $6,400 Rent Expense 0 2,000 Dep. Expense Supplies Expense 0 2,000 Total $100,600 $13,400 $102,000 $10,900$35,100$91,100$66,900 Net Income 24,200 Total $35,100 $91,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-20 P4-30D—Req. 5 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-21 P4-30D—Req. 5 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Expenses: Salaries Expense$6,400 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-22 P4-30D—Req. 5 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Expenses: Salaries Expense$6,400 Rent Expense2,000 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-23 P4-30D—Req. 5 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Expenses: Salaries Expense$6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-24 P4-30D—Req. 5 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Expenses: Salaries Expense$6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-25 P4-30D—Req. 5 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Expenses: Salaries Expense$6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000 Total Expenses 10,900 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-26 P4-30D—Req. 5 Service Revenue$35,100 Salaries Expense6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000 ELLIOT WILSON Income Statement Year Ended December 31, 2014 Revenues: Service Revenue $35,100 Expenses: Salaries Expense$6,400 Rent Expense2,000 Depreciation Expense—Equipment500 Supplies Expense2,000 Total Expenses 10,900 Net Income $24,200

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-27 P4-30D—Req. 5 ELLIOT WILSON Statement of Retained Earnings Year Ended December 31, 2014 Retained Earnings, January 1, 2014$10,000 Retained Earnings, January 1, 2014$10,000 Net income for the year24,200 Dividends7,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-28 P4-30D—Req. 5 ELLIOT WILSON Statement of Retained Earnings Year Ended December 31, 2014 Retained Earnings, January 1, 2014$10,000 Net income for the year 24,200 Retained Earnings, January 1, 2014$10,000 Net income for the year24,200 Dividends7,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-29 P4-30D—Req. 5 ELLIOT WILSON Statement of Retained Earnings Year Ended December 31, 2014 Retained Earnings, January 1, 2014$10,000 Net income for the year 24,200 34,200 Retained Earnings, January 1, 2014$10,000 Net income for the year24,200 Dividends7,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-30 P4-30D—Req. 5 ELLIOT WILSON Statement of Retained Earnings Year Ended December 31, 2014 Retained Earnings, January 1, 2014$10,000 Net income for the year 24,200 34,200 Dividends (7,100) Retained Earnings, January 1, 2014$10,000 Net income for the year24,200 Dividends7,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-31 P4-30D—Req. 5 ELLIOT WILSON Statement of Retained Earnings Year Ended December 31, 2014 Retained Earnings, January 1, 2014$10,000 Net income for the year 24,200 34,200 Dividends (7,100) Retained Earnings, December 31, 2014 $27,100 Retained Earnings, January 1, 2014$10,000 Net income for the year24,200 Dividends7,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-32 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-33 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-34 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-35 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Total Assets $77,000 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-36 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Total Assets $77,000 Liabilities Current Liabilities: Accounts Payable$15,000 Salaries Payable900 Unearned Revenue4,000 Total Current Liabilities $19,900 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-37 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Total Assets $77,000 Liabilities Current Liabilities: Accounts Payable$15,000 Salaries Payable900 Unearned Revenue4,000 Total Current Liabilities $19,900 Total Liabilities 19,900 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-38 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Total Assets $77,000 Liabilities Current Liabilities: Accounts Payable$15,000 Salaries Payable900 Unearned Revenue4,000 Total Current Liabilities $19,900 Total Liabilities 19,900 Stockholders’ Equity Common Stock 30,000 Retained Earnings27,100 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-39 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Total Assets $77,000 Liabilities Current Liabilities: Accounts Payable$15,000 Salaries Payable900 Unearned Revenue4,000 Total Current Liabilities $19,900 Total Liabilities 19,900 Stockholders’ Equity Common Stock 30,000 Retained Earnings27,100 Total Stockholders’ Equity57,100 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-40 P4-30D—Req. 5 ELLIOT WILSON Balance Sheet December 31, 2014 Assets Current Assets: Cash$18,000 Accounts Receivable20,000 Prepaid Rent3,000 Office Supplies1,000 Total Current Assets $42,000 Plant Assets: Equipment42,000 Less: Accumulated Depreciation—Equipment7,000 Total Plant Assets 35,000 Total Assets $77,000 Liabilities Current Liabilities: Accounts Payable$15,000 Salaries Payable900 Unearned Revenue4,000 Total Current Liabilities $19,900 Total Liabilities 19,900 Stockholders’ Equity Common Stock 30,000 Retained Earnings27,100 Total Stockholders’ Equity57,100 Total Liabilities and Stockholders’ Equity $77,000 Cash$18,000Accumulated Depreciation-Eq.$7,000 Accounts Receivable20,000Accounts Payable15,000 Prepaid Rent3,000Salaries Payable900 Office Supplies1,000Unearned Revenue4,000 Equipment42,000Common Stock30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-41 P4-30D—Req. 6 DateAccounts and ExplanationDebitCredit Dec. 31 Service Revenue35,100 Income Summary 35,100 To close revenue. Service Revenue 27,100Bal. 8,000Adj. Clos.35,100 Bal. 0 Income Summary 35,100Clos.

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-42 P4-30D—Req. 6 DateAccounts and ExplanationDebitCredit Dec. 31 Income Summary10,900 Salaries Expense 6,400 Rent Expense 2,000 Depreciation Expense—Equipment 500 Supplies Expense 2,000 To close expenses. Income Summary Clos.10,90035,100Clos. 24,200Bal.

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-43 P4-30D—Req. 6 Salaries Expense Bal.5,500 Adj.900 Bal.6,400 Clos. Bal.0 Rent Expense Bal.0 Adj.2,000 Bal.2,000 Clos. Bal.0 Depreciation Expense—Equip. Bal.0 Adj.500 Bal.500 Clos. Bal.0 Supplies Expense Bal.0 Adj.2,000 Bal.2,000 Clos. Bal.0

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-44 P4-30D—Req. 6 DateAccounts and ExplanationDebitCredit Dec. 31 Income Summary24,200 Retained Earnings 24,200 To close Income Summary. Income Summary Clos.10,90035,100Clos. 24,200 Bal. 0 Retained Earnings 10,000Bal. 24,200Clos.

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-45 P4-30D—Req. 6 DateAccounts and ExplanationDebitCredit Dec. 31 Retained Earnings7,100 Dividends 7,100 To close dividends. Dividends Bal.7,100 Clos. Bal.0 Retained Earnings 10,000Bal. Clos.7,10024,200Clos. 27,100Bal.

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-46 P4-30D—Req. 7 ELLIOT WILSON Post-Closing Trial Balance December 31, 2014 Account TitleBalance DebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 3,000 Office Supplies 1,000 Equipment 42,000 Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000Common Stock 30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-47 P4-30D—Req. 7 ELLIOT WILSON Post-Closing Trial Balance December 31, 2014 Account TitleBalance DebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 3,000 Office Supplies 1,000 Equipment 42,000 Accumulated Depreciation—Equipment $7,000 Accounts Payable 15,000 Salaries Payable 900 Unearned Revenue 4,000 Common Stock 30,000 Retained Earnings27,100 Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000Common Stock 30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-48 P4-30D—Req. 7 ELLIOT WILSON Post-Closing Trial Balance December 31, 2014 Account TitleBalance DebitCredit Cash $18,000 Accounts Receivable 20,000 Prepaid Rent 3,000 Office Supplies 1,000 Equipment 42,000 Accumulated Depreciation—Equipment $7,000 Accounts Payable 15,000 Salaries Payable 900 Unearned Revenue 4,000 Common Stock 30,000 Retained Earnings27,100 Total $84,000 Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000Common Stock 30,000 Retained Earnings27,100

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-49 P4-30D—Req. 8 Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000 Current Ratio═ Total current assets l Total current liabilities

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-50 P4-30D—Req. 8 Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000 Current Ratio═ Total current assets l Total current liabilities ═($18,000 + $20,000 + $3,000 + $1,000) ($15,000 + $900 + $4,000)

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-51 P4-30D—Req. 8 Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000 Current Ratio═ Total current assets l Total current liabilities ═($18,000 + $20,000 + $3,000 + $1,000) ($15,000 + $900 + $4,000) ═$42,000 $19,900

Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall4-52 P4-30D—Req. 8 Current Ratio═ Total current assets l Total current liabilities ═($18,000 + $20,000 + $3,000 + $1,000) ($15,000 + $900 + $4,000) ═$42,000 $19,900 ═2.1* *rounded Cash $18,000Accumulated Depreciation—Eq. $7,000 Accounts Receivable 20,000Accounts Payable 15,000 Prepaid Rent 3,000Salaries Payable 900 Office Supplies 1,000Unearned Revenue 4,000 Equipment 42,000

End of Chapter Copyright © 2014 Pearson Education, Inc. publishing as Prentice Hall