Prepaid Accts Acc Acc

TR Cash Accts Rec Inventory Rent PP&E Acc Depn Payable Interest IncTax
1 500
2 -200 200
3 200 200
4 -160 -160
5 130 -80
6 80 -45
7 35 -35
8 200
9 -300 300
9A -50
10 -10
11 1
12
-3
13 6
TB 202 45 75 250 200 -10 40 1 6
CL
E 202 45 75 250 200 -10 40 1 6

A Simple Example Company A Simple Example Company

Income Statement for year ending Balance Sheet as of
(In $) 20XX (In $) 20XX
Sales 210 Cash 202
Cost of Goods Sold 125 Accounts Receivable 45
Gross profit 85 Inventory 75
Operating Costs Prepaid Rent 250
Depreciation 10 Total current assets 572
Rent 50 60 PPE 200
EBIT 25 Less: Acc. Depn. 10 190
Interest Expense 1 Total Assets 762
Profit before tax 24 Accounts Payable 40
Tax Expense 6 Accrued Interest 1
Net Income 18 Accrued Tax 6
Dividends Payable 2
Total current liabilities 49
Bank Loan 200
Total Liabilities 249
Common Stock 200
APIC 300
Retained Earnings 13
Total Shareholders' Equity 513
Total Liabilities & Equity 762
 Cash AR Inventory
500 80 200
200 35 80
160 45
130 80 35 200 125
35 45 75
200
300
3
865 663
202

Accounts Payable Accrued Interest Accrued Taxes

200 1 6
160

160 200 0 1 0 6
40 1 6

Sales COGS Depreciation Expense

210 125 10
210 125 10

210 210 125 125 10 10

0 0 0

Copyright © 2022, R. Radhakrishna

Dividend Interest
Payable Loan CS APIC RE Sales COGS Rent Exp Dep Exp Exp
200 300

130 -80
80 -45

200

-50
-10
-1
5 -5
-3

2 200 200 300 -5 210 -125 -50 -10 -1

18 -210 125 50 10 1
2 200 200 300 13 0 0 0 0 0

TRIAL BALANCE DEBIT CREDIT

Cash 202
Accounts Receivable 45
Inventory 75
Prepaid Rent 250
PP&E 200
Acc. Depn. 10
Accounts Payable 40
Accrued Interest 1
Accrued Taxes 6
Dividend Payable 2
Bank Loan 200
Common Stock 200
APIC 300
Retained Earnings 5
Sales 210
COGS 125
Rent Exp 50
Dep Exp 10
Interest Exp 1
Tax Exp 6
969 969
 Prepaid Rent PP&E Acc.Depn.
300 200 10
50

300 50 200 0 0 10
250 200 10

Dividends Payable Common Stock APIC Retained Earnings

5 200 300 5
3

3 5 0 200 0 300 5
2 200 300

Rent Expense Interest Expense Tax Expense Bank Loan

50 1 6
50 1 6

50 50 1 1 6 6 0
0 0 0
TaxExp Check Tr Description DR CR
0 1 Dr. Cash 500
0 Cr. Common Stock 200
0 Cr. APIC 300
0
0 2 Dr. PP&E 200
0 Cr. Cash 200
0
0 3 Dr. Inventory 200
0 Cr. Accounts Payable 200
0
0 4 Dr. Accounts Payable 160
0 Cr. Cash 160
0

-6 0 5 Dr. Cash 130

-6 0 Cr. Sales 130
6 0
0 0 Dr. COGS 80
Cr. Inventory 80

6 Dr. Accounts Receivable 80

Cr. Sales 80

Dr. COGS 45
Cr. Inventory 45

7 Dr. Cash 35
Cr. Accounts Receivable 35

8 Dr. Cash 200

Cr. Bank Loan 200

9 Dr. Prepaid rent 300

Cr. Cash 300

9A Dr. Rent expense 50

Cr. Prepaid rent 50

10 Dr. Depreciation expense 10

Cr. Acc. Depreciation 10

11 Dr. Interest expense 1

Cr. Accrued interest 1

12 Dr. Retained Earnings 5

 Cr. Dividends Payable 5

12A Dr. Dividends Payable 3

Cr. Cash 3

13 Dr. Taxes expense 6

Cr. Accrued taxes 6

CL Dr. Sales 210

Cr. Cost of Goods Sold 125
Cr. Rent Expense 50
Cr. Depreciation Expense 10
Retained Earnings Cr. Interest Expense 1
Cr. Tax Expense 6
18 Cr. Retained Earnings 18

18
13

Bank Loan
200

200
200
Problem 2
Refer to Problem 2 (Artifical Corporation) on Slides 34 and 35 of SlideSet 2 to complete the assignment below.

TR Cash AR Inventory PP&E Acc Depn AccPay Accint Loan CS

OP 500 100 150 200 -30 350 400
1 680 680
2 -10 10
3 600
3 -450
4 -530 -530
5 -260
6 430 -430
7 100 100
8 -30
9 10
TB 230 270 380 210 -60 500 10 100 400
CL
E 230 270 380 210 -60 500 10 100 400

Artificial Corporation Artificial Corporation

Income Statement for year ending Balance Sheet as of
(In $) 20XX (In $) 20XX
Sales 600 Cash 230
Cost of Goods Sold 450 Accounts Receivable 270
Gross profit 150 Inventory 380
Operating Costs Total current assets 880
Depreciation 30 PPE 210
Wages 260 290 Less: Acc. Depn. 60 150
EBIT -140 Total Assets 1030
Interest Expense 10 Accounts Payable 500
Profit before tax -150 Accrued Interest 10
Tax Expense 0 Total current liabilities 510
Net Income -150 Bank Loan 100
Total Liabilities 610
Common Stock 400
Shows different ways of presenting the data Retained Earnings 20
with subtotals of data showed in a different Total Shareholders' Equity 420
columns, Total Liabilities & Equity 1030

Cash AR Inventory
500 100 150
10 600 680
530 430 450
 260 700 430 830 450
430 270 380
100

1030 800
230

Accounts Payable Accrued Interest Bank Loan

350 10 100
680
530
530 1030 0 10 0 100
500 10 100

Sales COGS Depreciation Expense

600 450 30
600 450 30

600 600 450 450 30 30

0 0 0
signment below.

RE Sales COGS WagesExp Dep Exp Interest Ex TaxExp

170 0 TR.
0 1
0
600 0
-450 0 2
0
-260 0
0 3
0
-30 0
-10 0 3
170 600 -450 -260 -30 -10 0
-150 -600 450 260 30 10 0
20 0 0 0 0 0 0 4

All numbers come from the pre-closing trial balance

TRIAL BALANCE DEBIT CREDIT 5
Cash 230
Accounts Receivable 270
Inventory 380 6
PP&E 210
Acc. Depn. 60
Accounts Payable 500 7
Accrued Interest 10
Bank Loan 100
Common Stock 400 8
Retained Earnings 170

Sales 600 9
COGS 450
Wages Exp 260
Dep Exp 30 CL
Interest Exp 10
Tax Exp 0
1840 1840

PP&E Acc.Depn.
200 30
10 30
 210 0 0 60
210 60

Common Stock Retained Earnings

400 170
150

0 400 150 170

400 20

Wages Expense Interest Expense Tax Expense

260 10
260 10

260 260 10 10 0 0
0 0 0
JOURNAL ENTRIES
DESCRIPTION DEBIT CREDIT
Dr. Inventory 680
Cr. Accounts Payable 680

Dr. W&E 10
Cr. Cash 10

Dr. Accounts Receivable 600

Cr. Sales 600

Dr. Cost of Goods Sold 450

Cr. Inventory 450

Dr. Accounts Payable 530

Cr. Cash 530

Dr. Wages Expense 260

Cr. Cash 260

Dr. Cash 430

Cr. Accounts Receivable 430

Dr. Cash 100

Cr. Loan 100

Dr. Depreciation Expense 30

Cr. Accumulated Depreciation 30

Dr. Interest Expense 10

Cr. Accrued Interest 10

Dr. Sales 600

Dr. Retained Earnings 150
Cr. Cost of Goods Sold 450
Cr. Wages Expense 260
Cr. Depreciation Expense 30
Cr. Interest Expense 10
Problem 3
Refer to Problem 3 (A Comprehensive Example Company) on Slides 36 and 37 of SlideSet 2 to complete the assignment belo

TR# Cash AccRec Inven PrepRent W&E AccDepn ComPaper AcPay AccSalaries
Op 2000 13000 22000 300 33000 -2000 4000 8300 500
1 7000 7000
2 12000
3 -8000
4 9500 -9500
5 -9000 -9000
6 4000 4000
7 -1000
8 -2000 2000
9 -2100 -100
10 -200
11 -300 300
-300
12
13
14
TB 1100 15500 21000 300 35000 -2200 8000 6300 400
CL
E 1100 15500 21000 300 35000 -2200 8000 6300 400

A Comprehensive Example Company A Comprehensive Example Company

Income Statement for year ending Balance Sheet as of
(In $) 20X1 (In $)
Sales 12000 Cash
Cost of Goods Sold 8000 Accounts Receivable
Gross profit 4000 Inventory
Operating Costs Prepaid Rent
Salaries 2000 Total current assets
Depreciation 200 PPE 35,000
Rent 300 2500 Less: Acc. Depn. 2,200
EBIT 1500 Total Assets
Interest Expense 200 Commercial Paper
Profit before tax 1300 Accounts Payable
Tax Expense 50 Accrued Salaries
Net Income 1250 Accrued Interest
Accrued Tax
Dividend Payable
Total current liabilities
Bank Loan
Total Liabilities
 Common Stock 25,000
Retained Earnings 11,725
Total Shareholders' Equity
Total Liabilities & Equity

Cash AR Inventory
2000 13000 22000
9500 12000 7000
9000 9500 8000
4000 25000 9500 29000 8000
1000 15500 21000
2000
2100
300
15500 14400
1100

Accounts Payable Accounts Salaries Accrued Interest

8300 500 0
7000 500 200
9000 400
9000 15300 500 900 0 200
6300 400 200

Sales COGS Salaries Expense

12000 8000 1600
12000 8000 400 2000

12000 12000 8000 8000 2000 2000

0 0 0
o complete the assignment below.

AccInt AccTaxes DivPay LTDebt ComSt RetEarn Sales COGS Salaries Exp DepnExp
0 0 0 20000 25000 10500

12000
-8000

-1000

-2000
-200

200
50
25 -25
200 50 25 19000 25000 10475 12000 -8000 -2000 -200
1250 -12000 8000 2000 200
200 50 25 19000 25000 11725 0 0 0 0

All numbers reflect the pre-closing trial balance

ample Company TRIAL BALANCE DEBIT CREDIT
Cash 1,100
20X1 20X0 Accounts Receivable 15,500
$ 1,100 $ 2,000 Inventory 21,000
15,500 13,000 Prepaid Rent 300
21,000 22,000 PP&E 35,000
300 300 Acc. Depn. 2,200
$ 37,900 $ 37,300 Commercial Paper 8,000
33,000 Accounts Payable 6,300
32,800 2,000 31,000 Accrued Salaries 400
$ 70,700 $ 68,300 Accrued Interest 200
8,000 4,000 Accrued Taxes 50
6,300 8,300 Dividends Payable 25
400 500 LT Debt 19,000
200 - Common Stock 25,000
50 - Retained Earnings 10,475
25 - Sales 12,000
14,975 12,800 COGS 8,000
19,000 20,000 Salaries Exp 2,000
33,975 32,800 Dep Exp 200
 25,000 Rent Exp 300
10,500 Interest Exp 200
36,725 35,500 Tax Exp 50
$ 70,700 $ 68,300 TOTAL 83,650 83,650

Prepaid Rent W&E Acc.Depn. Commercial Paper

300 33000 2000
300 2000 200
300
600 300 35000 0 0 2200 0
300 35000 2200

Accrued Taxes Dividends Payable LT Debt Common Stock

0 0 20000
50 25 1000

0 50 0 25 1000 20000 0
50 25 19000

Depreciation Expense Rent Expense Interest Expense Tax Expense

200 300 200 50
200 300 200

200 200 300 300 200 200 50

0 0 0 0
RentExp IntExp TaxExp Check JOURNAL ENTRIES
0 Tr Description
0 1 Dr. Inventory
0 Cr. Accounts Payable
0
0 2 Dr. Accounts Receivable
0 Cr. Sales
0
0 3 Dr. Cost of Goods Sold
0 Cr. Inventory
0
0 4 Dr. Cash
0 Cr. Accounts Receivable
-300 0
-200 0 5 Dr. Accounts Payable
-50 0 Cr. Cash
0
-300 -200 -50 0 6 Dr. Cash
300 200 50 0 Cr. Commercial Paper
0 0 0 0
7 Dr. Long Term Debt
Cr. Cash

8 Dr. W&E
Cr. Cash

9 Dr. Salaries Expense

Dr. Salaries Payable
Cr. Cash

9A Dr. Salaries Expense

Cr. Salaries Payable

10 Dr. Depreciation Expense

Cr. Accumulated Depreciation

11 Dr. Rent Expense

Cr. Prepaid Rent

Dr. Prepaid Rent

Cr. Cash

12 Dr. Interest Expense

 Cr. Accrued Interest

13 Dr. Tax Expense

Cr. Accrued Taxes

14 Dr. Retained Earnings

Commercial Paper Cr. Dividends Payable
4000
4000 CL Dr. Sales
Cr. Cost of Goods Sold
8000 Cr. Salaries Expense
8000 Cr. Depreciation Expense
Cr. Rent Expense
Cr. Interest Expense
Cr. Tax Expense
Cr. Retained Earnings

Common Stock Retained Earnings

25000 10500
25
1250
25000 25 11750
25000 11725

Tax Expense

50

50
 DR CR
7,000
7,000

12,000
12,000

8,000
8,000

9,500
9,500

9,000
9,000

4,000
4,000

1,000
1,000

2,000
2,000

1,600
500
2,100

400
400

200
200

300
300

300
300

200
 200

50
50

25
25

12,000
8,000
2,000
200
300
200
50
1,250