Total rent for the year should reflect 12 payments of $2,100 per month. Prepaid

Question

Total rent for the year should reflect 12 payments of $2,100 per month. Prepaid rent is
included in the Prepaid Expenses account.

WHD Goods, Inc. Balance Sheet For the Year Ended December 31, 2016 ASSETS Accounts receivable Cash Inventory Supplies inventory Prepaid expenses Equipment Total assets $45,000 $ 42,500 $65,000 1,000 8,000 $74,000 S 235,500 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Accounts payable Accumulated depreciation Allowance for doubtful accounts Dividend payable Income tax payable Interest payable Notes payable - long-term Payroll taxes payable Sales tax payable S27,500 $32,000 $1,500 $ 20,000 $11,522 $1,350 $36,000 $4,000 800 $ 134,672 Total liabilities Stockholders' equity: Common stock Additional paid-in capital Retained earnings Treasury stock $16,000 $5,000 $83,828 $(4,000 100,828 $ 235,500 Total stockholders' equity Total liabilities and stockholders' equity WHD Goods, Inc. has hired you to review the financial statements and make any necessary adjustments before being presented to the board of directors. The President of the Company, Ms. Thimble has provided the following information to help you adjust the financial statements

Explanation / Answer

adjusting entry :

Date account & explanation debit credit Rent expenses 2100 Prepaid expenses a/c 2100 (To record expenses adjusted)

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