Financial Acct. for Puja


Selected amounts at December 31, 2003, from the Hay and Barnabas Company’s information system appear as follows:

Cash paid employees for salaries and wages


Cash collected from sales customers


Bonds payable




Common stock




Prepaid insurance




Prepaid rent


Retained earnings


Salaries and wages expense




You are to complete each of the following tasks.

Part A

There are five adjustments that need to be made before the financial statements can be prepared at year end. Show the effect of each of the following (a – e) on the accounting equation.

  1. The equipment (purchased on January 1, 2003) has a useful life of 12 years with no salvage value (Straight-line method is used).
  2. Interest accrued on the bonds payable is $20,000 as of December 31, 2003.
  3. Unexpired insurance at December 31, 2003 is $7,000.
  4. The rent payment of $140,000 covered the four months from December 1, 2003 through March 31, 2004.
  5. Salaries and wages of $28,000 were earned but unpaid at December 31, 2003.

Part B

Indicate the proper balance sheet classification of each of the preceding 12 financial statement items on the December 31, 2003, balance sheet. If the account title would not appear on the balance sheet, indicate the financial statement on which it would be found.

  1. Current assets
  2. Property, plant, and equipment
  3. Current liabilities
  4. Long-term liabilities
  5. Stockholders’ equity

Please submit your assignment.


Grading Criteria

% of grade for this assignment

Part A


Part B



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