On December 31, 2016, Information Inc. completed its third year of operations. A

Question

On December 31, 2016, Information Inc. completed its third year of operations. Abdul Mukhtar is a student working part-time in the company’s business office while taking his first accounting course. Abdul assembled the following list of account balances, which are not arranged in any particular order:

These account amounts are correct, but Abdul did not consider the following information:

What is the company's unearned revenue, rent revenue, and retained earnings?

Accounts Receivable $150,000 Advertising Expense $ 76,000 Interest Expense 2,000 Cash 20,000 Notes Receivable 26,000 Inventory 140,000 Cost of Goods Sold 590,000 Dividends Declared 12,000 Common Shares 570,000 Unearned Revenue 6,000 Building 360,000 Insurance Expense 6,300 Accumulated Depreciation, Equipment 20,000 Retained Earnings (as at January 1, 2016) 177,000 Land 160,000 Equipment 200,000 Accumulated Depreciation, Building 40,000 Miscellaneous Expense 5,200 Sales 963,000 Accounts Payable 72,700 Utilities Expense 2,500 Wages Expense 125,000 Notes Payable 30,000 Supplies 3,700

Explanation / Answer

Company's Unearned Revenue = 10,400 (Unearned revenue = 6,000 + Unearned Rent Revenue = 4,400)

Rent Revenue = 2,200

Retained Earnings = 232,967

Workings:

Adjustments Particulars Amount Category Category 1 2 3 4 5 6 7 Revised account balances Accounts Receivable 150,000 Balance Sheet Items Assets 150,000 Interest Expense 2,000 Profit and Loss Items Expenses 2,000 Notes Receivable 26,000 Balance Sheet Items Assets 26,000 Cost of Goods Sold 590,000 Profit and Loss Items Expenses 590,000 Common Shares (570,000) Balance Sheet Items Liabilities (570,000) Building 360,000 Balance Sheet Items Assets 360,000 Accumulated Depreciation, Equipment (20,000) Balance Sheet Items Liabilities (22,000) (42,000) Land 160,000 Balance Sheet Items Assets 160,000 Accumulated Depreciation, Building (40,000) Balance Sheet Items Liabilities (17,000) (57,000) Sales (963,000) Profit and Loss Items Incomes (963,000) Utilities Expense 2,500 Profit and Loss Items Expenses 2,500 Notes Payable (30,000) Balance Sheet Items Liabilities (30,000) Advertising Expense 76,000 Profit and Loss Items Expenses 76,000 Cash 20,000 Balance Sheet Items Assets 6,600 26,600 Inventory 140,000 Balance Sheet Items Assets 140,000 Dividends Declared 12,000 Profit and Loss Items Expenses 47,000 59,000 Unearned Revenue (6,000) Balance Sheet Items Liabilities (6,000) Insurance Expense 6,300 Profit and Loss Items Expenses (900) 5,400 Retained Earnings (as at January 1, 2016) (177,000) Balance Sheet Items Liabilities (177,000) Equipment 200,000 Balance Sheet Items Assets 200,000 Miscellaneous Expense 5,200 Profit and Loss Items Expenses 5,200 Accounts Payable (72,700) Balance Sheet Items Liabilities (72,700) Wages Expense 125,000 Profit and Loss Items Expenses 2,800 127,800 Supplies 3,700 Profit and Loss Items Expenses (500) 3,200 Prepaid Insurance Balance Sheet Items Assets 900 900 Interest Income Profit and Loss Items Incomes (867) (867) Interest Receivable Balance Sheet Items Assets 867 867 Supplies on hand Balance Sheet Items Assets 500 500 Rent Revenue Profit and Loss Items Incomes (2,200) (2,200) Unearned Rent Revenue Balance Sheet Items Liabilities (4,400) (4,400) Depreciation Profit and Loss Items Expenses 39,000 39,000 Salary Payable Balance Sheet Items Liabilities (2,800) (2,800) Dividend Payable Balance Sheet Items Liabilities (47,000) (47,000)

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.