ormal balances) at December 31, 2019: Accounts payable $16,700 Accounts receivable 39,200 Accumulated depreciation (equipment) 36,800 Cash 6,700 Common stock (20,000 shares) 100,000 Depreciation expense (equipment) 12,300 Dividends 6,300 Equipment 269,500 Income taxes expense

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Begin with the following account balances for University Street Parking Garage (assume all accounts have normal balances) at December 31, 2019:

Accounts payable $16,700
Accounts receivable 39,200
Accumulated depreciation (equipment) 36,800
Cash 6,700
Common stock (20,000 shares) 100,000
Depreciation expense (equipment) 12,300
Dividends 6,300
Equipment 269,500
Income taxes expense 2,700
Income taxes payable 1,100
Interest expense 16,500
Interest payable 0
Interest income 4,100
Inventory 4,900
Investments 35,000
Notes payable (due May 2, 2025) 160,000
Prepaid rent (4 months) 36,400
Rent expense 94,400
Retained earnings, 12/31/2018 43,000
Service revenue, parking 224,600
Service revenue, repair 208,100
Supplies expense 36,900
Wages expense 233,600
Wages payable 0

Required:

Question Content Area

1.  For the following transactions, provide the necessary adjusting entries and update the account balances to appropriately reflect these adjusting entries:

a.  University Street Parking rents space that requires a rental payment of $9,100 per month. University Street Parking has prepaid rent through March 31, 2020.

b.   At December 31, 2019, University Street Parking owes employees wages of $12,500.

c.  University Street Parking should have total depreciation expense on equipment for 2019 of $14,300.

d.  The note payable of $160,000 has an interest rate of 6.75%. University Street Parking has paid interest through October 31, 2019.

a.
 
Rent Expense  
 
 
  Prepaid Rent
  (Adjust rent)    
b.
 
Wages Expense  
 
 
  Wages Payable
  (Adjust wages)    
c.
 
Depreciation Expense  
 
 
  Accumulated Depreciation (equipment)
  (Record depreciation)    
d.
 
Interest Expense  
 
 
  Interest Payable
  (Record interest)    
 
 

Question Content Area

2.  Prepare a properly classified income statement for 2019 using the post-adjustment account balances.

University Street Parking GarageIncome StatementFor the Year Ended December 31, 2019
 
$Service revenue, parking  
 
Service revenue, repair  
Total revenue   $fill in the blank 6b95ddf94fd2fac_5
Operating expenses:    
 
$Wages expense  
 
Rent expense  
 
Supplies expense  
 
Depreciation expense (equipment)  
Total operating expenses   fill in the blank 6b95ddf94fd2fac_14
 
  $Income from operations
Other income (expense):    
 
$Service revenue, parking  
 
Accounts payable  
Total other income (expense)   fill in the blank 6b95ddf94fd2fac_21
 
  $Income from operations
 
  - Select -
 
  $- Select -
 
 

Question Content Area

Prepare a properly classified retained earnings statement for 2019 using the post-adjustment account balances.

University Street Parking GarageRetained Earnings StatementFor the Year Ended December 31, 2019
 
$- Select -
 
- Select -
 
- Select -
 
$- Select -
 
 

Question Content Area

Prepare a properly classified balance sheet as of December 31, 2019 using the post-adjustment account balances.

University Street Parking GarageBalance SheetDecember 31, 2019
Assets      
Current assets:      
 
$- Select -    
 
     
 
     
 
     
Total current assets      
 
     
 
     
 
     
 
     
Total assets      
Liabilities and Stockholders' Equity      
Current liabilities:      
 
     
 
     
 
     
 
     
Total current liabilities      
Long-term liabilities:      
 
     
Total liabilities     $
Stockholders' equity:      
 
  $- Select -  
 
  - Select -  
Total stockholders' equity     fill in the blank 39a4c2091fa6fa1_35
Total liabilities and stockholders' equity  
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