Documente Academic
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Cash
200000
Paid in Capital
Dec 1
Dec 1
Dec 4
Dec 8
Dec 12
Dec 15
Dec 17
Dec 23
200000
Equipment
Cash
Notes Payable
240000
Cash
Advance rent
12000
Office Supplies
Modern Office
1000
Cash
Unearned Fee rental
8000
Salary expense
Cash
5200
Cash
Receivables
Revenue earned
12000
6000
Repair expenses
Earth Movers Inc.
600
Cash
2000
140000
100000
12000
1000
8000
5200
18000
600
Receivables
Dec 26
Dec 27
Dec 28
Dec 29
2000
Salary expenses
Cash
5200
600
Dividends
Dividends payable
20000
Prepaid Insurance
9600
5200
600
20000
Adjusting Entries
Dec 31
Advance rent
Rent
4000
4000
Dec 31
Dec 31
Dec 31
Dec 31
Dec 31
Interest expenses
Interest payable
5000
Accumulated Depreciation
Rental equipment
2500
400
3700
Salary expenses
Salary payable
1400
5000
2500
400
3700
1400
Date
1-Dec
8-Dec
15-Dec
23-Dec
Paid in capital
Unearned fee
rental
Revenue earned
Receivables
Total:
Date
Date
1-Dec
1-Dec
Cash
Notes payable
Total:
Date
Cash
Amount
200000
Equipment
Amount
140000
Advance Rent
Salary Expenses
Salary Expenses
Earth Movers
Pre paid insurance
Closing balance
Total:
12000
5200
5200
600
9600
49400
222000
Paid in capital
Amount
Date
1-Dec
Cash
Amount
200000
Equipments
Amount
Date
140000 31-Dec
100000 31-Dec
240000
Depreciation
Closing balance
Total:
Amount
2500
237500
240000
Notes payable
Amount
Date
1-Dec
Equipment
Amount
100000
8000
12000
2000
Date
1-Dec
1-Dec
12-Dec
26-Dec
27-Dec
29-Dec
31-Dec
222000
Office Supplies
Amount
Date
Date
4-Dec
Modern Office
Date
Date
31-Dec
31-Dec
Date
12-Dec
Amount
31-Dec
Office supplies
expenses
400
Modern Office
Amount
Date
4-Dec
Office Supplies
Amount
1000
Cash
Amount
8000
Total:
8000
1000
Revenue Earned
Closing balance
Total:
Unearned fee
rental
Amount
Date
3700
8-Dec
4300
8000
Cash
Salary Expenses
Amount
Date
5200 31-Dec
P/L account
Amount
11800
26-Dec
Cash
31-Dec
Salary payable
Total:
Date
15-Dec
Date
31-Dec
Date
27-Dec
Date
17-Dec
Date
28-Dec
Revenue earned
5200
1400
11800
Total:
Receivables
Amount
Date
6000 23-Dec
31-Dec
6000
Total:
Cash
Receivables
Unearned fee rental
Total:
Amount
12000
6000
3700
21700
Cash
Repair Expenses
Amount
600
Repair Expenses
Amount
Date
600
Dividends Payable
Dividend
s
Amount
20000
P/L account
Amount
Dividends
Amount
20000
Amount
Cash
Amount
Advance rent
Rent
Amount
4000
Date
1-Dec
Amount
Date
Dividends Payable
Amount
Date
28-Dec
Date
31-Dec
Amount
2000
4000
6000
Revenue Earned
Amount
Date
21700 15-Dec
15-Dec
31-Dec
21700
Date
Date
29-Dec
Cash
Closing balance
11800
Cash
Date
Advance Rent
Amount
Date
12000 31-Dec
31-Dec
Rent
Closing balance
Amount
4000
8000
Date
31-Dec
Interest payable
Interest payable
Amount
Date
31-Dec
Date
Date
31-Dec
Interest expenses
Amount
Date
5000
Equipment
Amount
Interest expenses
Depreciation
Amount
Date
2500
Amount
5000
Amount
Date
Office supplies
Amount
400
Date
Amount
Salary Payable
Amount
Date
Amount
31-Dec
Salary
1400
Trial Balance
Accounts
Cash
Capital
Equipment
Notes payable
Office Supplies
Modern ofice
Unearned fee rental
Salary Expenses
Receivables
Revenue Earned
Repair Expenses
Dividends
Dividends Payable
Pre paid Insurance
Advance Rent
Rent
Interest expenses
Interest payable
Depreciation
Debit
49400
Credit
200000
237500
100000
600
1000
4300
11800
4000
21700
600
20000
20000
9600
8000
4000
5000
5000
2500
400
1400
$35340
0
$35340
0
21700
11800
600
4000
5000
2500
400
24300
(2600)
0
(2600)
20000
Closing balance
(22600)
200000
(22600)
177400
100000
100000
1000
4300
20000
5000
1400
Total:
31700
309100
Asset
s
Fixed Asset
Equipment
237500
237500
Current Assets
Cash
Office Supplies
Receivables
Pre paid Insurance
Advance Rent
49400
600
4000
9600
8000
71600
Total:
309100
f) During December, this companys cash balance has fallen from $200,000 to
$65,000. This does not appear headed for insolvency in the near future. Its
impossible to look at the companys bank balance for one month period and
evaluate the companys financial situation. Many factors come to play like the
account receivable or when the company has to pay for its purchases. So the
decrease in cash balance will not accurately prove that the company is headed for
insolvency.
g) I think it would be ethical for Patty Driver to maintain the accounting records for
this company as long as she keeps the integrity of the records. All transactions
usually have receipts and documents that come with it. This will help prevent
accountants to commit frauds .