Problem 2–2 (continued)
Requirements 1 and 3
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
_____________________________ _____________________________
1/1 Bal. 5,000
1/1 Bal.
1/31 Bal.
Inventory Equipment
_____________________________ _____________________________
1/1 Bal. 5,000
1/1 Bal.
_______
1/31 Bal.
Problem 2–2 (continued)
Accumulated depreciation Accounts payable
_____________________________ _____________________________
3,500 1/1 Bal.
Common stock Retained earnings
_____________________________ _____________________________
Problem 2–2 (continued)
INCOME STATEMENT ACCOUNTS
Sales revenue Cost of goods sold
_____________________________ _____________________________
0 1/1 Bal.
0
Rent expense Salaries and wages expense
_____________________________ _____________________________
1/1 Bal. 0 1/1 Bal. 0
Advertising expense
_____________________________
1/1 Bal. 0
Problem 2–2 (concluded)
Requirement 4
Account Title Debits Credits
Cash 1,400
Accounts receivable 3,000
Inventory 9,700
Problem 2–3
1. Depreciation expense…………………………………………. 10,000
Accumulated depreciation………………………………. 10,000
2. Salaries and wages expense………………………………… 1,500
Salaries and wages payable…………………………….. 1,500
Problem 2–4
Requirements 1 and 2
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
_______________________________________________________________________________________________ _______________________________________________________________________________________________
_______
12/31 Bal.
Prepaid rent
_____________________________________________________________________________
_______
Prepaid insurance Supplies
_____________________________________________________________________________ _____________________________________________________________________________
Bal. 0 Bal. 1,500
12/31 Bal.
Inventory Note receivable
_______________________________________________________________________________________________ _______________________________________________________________________________________________
_______
Office equipment Interest receivable
_____________________________________________________________________________ _____________________________________________________________________________
Bal. 80,000
Problem 2–4 (continued)
Accumulated depreciation Accounts payable
_____________________________ _____________________________
30,000Bal. 31,000
Bal.
Salaries and wages payable Note payable
________________________________________________________ ________________________________________________________
0 Bal. 50,000
Bal.
1,500 2.
Interest payable Deferred revenue
________________________________________________________________ ________________________________________________________________
0 Bal. 0 Bal.
Common stock Retained earnings
________________________________________________________ ________________________________________________________
Problem 2–4
(continued)
INCOME STATEMENT ACCOUNTS
Sales revenue Interest revenue
________________________________________________________________ ________________________________________________________________
148,000 Bal. 0 Bal.
Cost of goods sold Salaries and wages expense
_____________________________________________________________________________ _____________________________________________________________________________
Rent expense Depreciation expense
_____________________________________________________________________________ _____________________________________________________________________________
Bal. 11,000
Bal. 0
Interest expense Supplies expense
_____________________________________________________________________________ _____________________________________________________________________________
Bal. 0 Bal. 1,100
Insurance expense Advertising expense
_____________________________________________________________________________ _____________________________________________________________________________
12/31 Bal.
Problem 2–4 (continued)
Requirement 3
Account Title Debits Credits
Cash 30,000
Accounts receivable 40,000
Prepaid rent 1,000
Problem 2–4 (continued)
Requirement 4
PASTINA COMPANY
Income Statement
For the Year Ended December 31, 2018
Sales revenue ………………………………………. $146,000
Cost of goods sold ……………………………….. 70,000
Gross profit …………………………………………. 76,000
Operating expenses:
Salaries and wages…………………………….. $20,400
Rent ………………………………………………… 12,000