The following data were taken from the adjusted trial balance of Kent Corporatio
ID: 2552960 • Letter: T
Question
The following data were taken from the adjusted trial balance of Kent Corporation. Kent Corporation Adjusted Trial Balance Data December 31, 2010 $12,000 13,000 6,000 9,000 60,000 40,000 24,000 22,000 15,000 25,000 40,000 1,000 3,000 23,000 2,000 Accounts Payable Accounts Receivable Accumulated Depreciation-Building Accumulated Depreciation-Furniture & Fixtures Building Capital Stock Cash Copyrights Furniture & Fixtures Land Note Payable (10%, due in 5 years) Office Supplies Prepaid Insurance Retained Earnings (January 1, 2010) Salaries Payable Service Revenue Salaries Expense Utilities Expense Depreciation Expense Insurance Expense Office Supplies Expense Interest Expense 85,000 28,000 2,000 5,000 2,000 1,000 4,000 Note: Dividends declared during the year was $12,000. Required: Prepare a classified balance sheet at December 31, 2010. (Ignore income taxes). Hint: you will have to prepare an income statement and statement of retained earnings to arrive at the ending Retained Earnings (December 31, 2010) which you will need in order to prepare the balance sheet.Explanation / Answer
Answer:
Kent corporation
Balancehseet
Assets
Current Assets
Accounts Receivable
13,000
Cash
24,000
Prepaid Insurance
3,000
Office Supplies
1,000
Total Current Assets
41000
Land
25000
Fixed Assets
Building
60000
Accumulated Depreciation - Building
-6000
54000
Furniture & Fixtures
15000
Accumulated Depreciation - Furniture
-9000
6000
Total Fixed Assets
85000
Other Fixed Assets
Copyrights
22000
Total Assets
148000
Liabilities and share holder's Equity
Current Liabilities
Accounts Payable
12,000
Salary Payable
2,000
Total current Liabilities
14,000
Long term Liabilities
Note Payable
40,000
Total Liabilities
54000
Owner's Equity
Capital Stock
40,000
Retained Earnings
54,000
Total owner's Equity
94,000
94000
Total Liabilities & Owner's Equity
148000
Working notes for the above answer is as under
1
Kent corporation
Income Statement
Amount $
Amount $
Revenue from operations
Service revenue
85,000
Less: Expenses
Salaries Expense
28,000
Utilities Expense
2,000
Depreciation Expense
5,000
Insurance Expense
2,000
Office Supplies Expense
1,000
Interest Expense
4,000
Total Expenses
42,000
Net Income
43,000
2
Retained Earnings (January 1, 2010)
23,000
Add: net income
43,000
Less: Dividend Paid
12,000
Retained Earnings (December 31, 2010)
54,000
Kent corporation
Balancehseet
Assets
Current Assets
Accounts Receivable
13,000
Cash
24,000
Prepaid Insurance
3,000
Office Supplies
1,000
Total Current Assets
41000
Land
25000
Fixed Assets
Building
60000
Accumulated Depreciation - Building
-6000
54000
Furniture & Fixtures
15000
Accumulated Depreciation - Furniture
-9000
6000
Total Fixed Assets
85000
Other Fixed Assets
Copyrights
22000
Total Assets
148000
Liabilities and share holder's Equity
Current Liabilities
Accounts Payable
12,000
Salary Payable
2,000
Total current Liabilities
14,000
Long term Liabilities
Note Payable
40,000
Total Liabilities
54000
Owner's Equity
Capital Stock
40,000
Retained Earnings
54,000
Total owner's Equity
94,000
94000
Total Liabilities & Owner's Equity
148000
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