Problem 2–4 (continued)
PASTINA COMPANY
Statement of Shareholders’ Equity
For the Year Ended December 31, 2018
Total
Common Retained Shareholders’
Stock Earnings Equity
Balance at January 1, 2018 $60,000 $28,500 $ 88,500
Issue of common stock – 0 – – 0 –
Problem 2–4 (continued)
PASTINA COMPANY
Balance Sheet
At December 31, 2018
Assets
Current assets:
Cash …………………………………………………… $ 30,000
Accounts receivable …………………………….. 40,000
Supplies ……………………………………………… 800
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable ………………………………….. $ 31,000
Shareholders’ equity:
Common stock ……………………………………… $60,000
Problem 2–4 (continued)
Requirement 5
December 31, 2018
Sales revenue………………………………………………………… 146,000
Income summary…………………………………………………… 120,950
………………………………………………….Cost of goods sold
…………………………………………………………………………70,000
……………………………………..Salaries and wages expense
Problem 2–4 (continued)
Sales revenue Interest revenue
________________________________________________________ ________________________________________________________
148,000 Bal. 0 Bal.
7. 2,000
Cost of goods sold Salaries and wages expense
________________________________________________________ ________________________________________________________
Bal. 70,000
_______
12/31 Bal. 012/31 Bal. 0
Rent expense Depreciation expense
______________________________________________ ______________________________________________
Bal. 11,000
_______
12/31 Bal. 012/31 Bal. 0
Interest expense Supplies expense
______________________________________________ ______________________________________________
Bal. 0 Bal. 1,100
3. 1,500
12/31 Bal. 012/31 Bal. 0
Problem 2–4 (continued)
Insurance expense Advertising expense
________________________________________ ________________________________________
Bal. 6,000
12/31 Bal. 012/31 Bal. 0
Income summary Retained earnings
__________________________________________________ __________________________________________________
Bal. 0 24,500
Bal.
_______
12/31 Bal.
Problem 2–4 (concluded)
Requirement 6
Account Title Debits Credits
Cash 30,000
Accounts receivable 40,000
Prepaid rent 1,000
Prepaid insurance 3,750
equipment 40,000
Accounts payable 31,000
Salaries and wages payable 1,500
Problem 2–5
Rent expense…………………………………………………………. 800
…………………………………………………………..Prepaid rent
……………………………………………………………………….800
Supplies expense……………………………………………………. 700
…………………………………………………………………Supplies
……………………………………………………………………….700
Problem 2–6
Requirement 2
a. Cash………………………………………………………………… 70,000
c. Cash………………………………………………………………… 10,000
Common stock………………………………………………. 10,000
d. Salaries expense ……………………………………………….. 41,000
Problem 2–6 (continued)
Requirements 1 and 3
BALANCE SHEET ACCOUNTS
Cash Accounts receivable
_____________________________ _____________________________
1/1 Bal. 30,000
1/1 Bal.
a. 70,000
b. 27,300
_______
12/31 Bal.
Equipment
_____________________________
Accumulated depreciation Salaries payable
_____________________________ _____________________________
Common stock Retained earnings
_____________________________ _____________________________
40,5001/1 Bal. 9,500
1/1 Bal.