Requirement 3
Blue Hens Corporation
Balance Sheet
December 31, 2015
Assets Liabilities
Cash $ 15,700 Accounts payable $ 9,300
Accts. receivable 132,500 Salaries payable 12,500
Stockholders’ Equity
Equipment 280,000 Common stock 126,200
Accum. depr. (156,900) Retained earnings 131,500 *
* Retained earnings = beginning retained earnings + net income − dividends
Exercise 3-17
Requirement 1
December 31, 2015 Debit Credit
Service Revenue 48,500
Interest Revenue 11,500
Retained Earnings 45,800
Salaries Expense 15,900
Rent Expense 3,600
Advertising Expense 8,700
Retained Earnings 3,200
Requirement 2
Retained Earnings
45,800
20,000
60,000
Exercise 3-18
Requirement 1
December 31, 2015 Debit Credit
Service Revenue 36,300
Retained Earnings 47,300
Salaries Expense 21,900
Advertising Expense 8,500
Retained Earnings 4,200
Requirement 2
Retained Earnings
16,500
Exercise 3-19
Requirement 1
December 31, 2015 Debit Credit
Service Revenue 420,000
Retained Earnings 366,000
Salaries Expense 310,000
Rent Expense 24,300
Depreciation Expense 26,500
Requirement 2
Blue Hens Corporation
Post-Closing Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $ 15,700
Accounts receivable 132,500
Prepaid rent 6,100
Office supplies 34,400
Equipment 280,000
Exercise 3-20
Requirement 1
Debit Credit
1. Cash 22,000
2. Cash 40,000
Accounts Receivable 30,000
3. Salaries Expense 25,000
4. Prepaid Rent 18,000
5. Supplies 20,000
6. Dividends 3,000
Exercise 3-20 (continued)
Requirement 2
Debit Credit
1. Salaries Expense 5,000
2. Rent Expense 4,500
3. Supplies Expense 23,000
4. Unearned Revenue 6,000
Exercise 3-20 (continued)
Requirement 3
Red Flash Photography
Adjusted Trial Balance
December 31, 2015
Accounts Debit Credit
Cash $ 31,000
Accounts Receivable 30,000
Supplies 4,000
Prepaid Rent 13,500
Land 64,000
Exercise 3-20 (continued)
Requirement 4
Red Flash Photography
Income Statement
For the year ended December 31, 2015
Service revenue $76,000
Expenses:
Salaries 30,000
Rent 4,500
Red Flash Photography
Statement of Stockholders’ Equity
For the period ended December 31, 2015
Common
Stock
Retained
Earnings
Total
Stockholders’
Equity
Balance at January 1 $60,000 $20,000 $ 80,000
Issuance of common stock 22,000 22,000
Exercise 3-20 (continued)
Requirement 4 (continued)
Red Flash Photography
Balance Sheet
December 31, 2015
Assets Liabilities
Cash $ 31,000 Accounts payable $ 20,000
Accounts receivable 30,000 Salaries payable 5,000
Supplies 4,000 Total current liabilities 25,000
Prepaid rent 13,500 Stockholders’ Equity
Exercise 3-20 (concluded)
Requirement 5
December 31, 2015 Debit Credit
Service Revenue 76,000
Retained Earnings 57,500
Salaries Expense 30,000
Rent Expense 4,500
Retained Earnings 3,000