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EXERCISE VI

Assets Owner`s equity and liabilities
Equipment 4,000 Paid-in Capital 3,000
Land 10,200 Retained Earnings 1,000
Office Supplies Inventory 2,000 Loan Payable 4,800
Accounts Receivable 3,600 Tax payables 900
Cash, Bank 6,500 Accounts payable 4,100
Prepaid expenses 900 Salary payable 1,400
Unearned rent revenue 12,000
Total assets 27,200 Total equities 27,200
ASSETS ACCOUNTS
CASH, BANK OFFICE SUPPLY INVENTORY ACCOUNT RECEIVABLES EQUIPMENT LAND PREPAID EXPENSES
Dt Ct Dt Ct Dt Ct Dt Ct Dt Ct Dt Ct
EQUITY AND LIABILITIES ACCOUNTS
PAID IN CAPITAL RETAINED EARNINGS TAX PAYABLES ACCOUNTS PAYABLES LOAN PAYABLE SALARY PAYABLES UNEARNED RENT REVENUE
Dt CT Dt Ct Dt Ct Dt Ct Dt Ct Dt Ct Dt Ct
TEMPORARY ACCOUNTS
transactions
1. Purchase of € 1 200 of Office Supplies Inventory with 60 day credit term
2. Performed consulting services, for which we received € 3,900 cash immediately.
3. Received an invoice for a series of advertisements, € 1 500, that appeared in the local news during December and will be paid in January.
4. Performed advertisement services for Customer XYZ, for which we will receive € 1,700 on 2 month credit sale.
5. Paid salaries to employees of € 1 000 for December.
6. Received an invoice for external services of € 1 300 for December to be paid with 60 credit term
7. Paid outstanding tax payables.
8. Paid trade creditors € 2,300.
9. The cost of office supplies used during December is € 1,000.
10. In the beginning of September 2014 a subscription rights for local newspaper magazine of € 1 200 was paid for whole year term in advance;
11. In the beginning of October 2014 company receives rent for 8 months in advance, €16,000
12. Salaries to employees of € 1 300 were calculated for December to be paid in January.
13. At the end of the month Company repaid to the Bank credit tranche 1,000 and paid interest charges (interest rate as of 10 % p.a.)
14. Depreciation of equipment for December amounts to € 500.
INCOME STATEMENT
EXPENSES REVENUES
Assets Owner`s equity and liabilities
Equipment Paid-in Capital
Land Retained Earnings
Office Supplies Inventory Loan Payable
Accounts Receivable Tax payables
Cash, Bank Accounts payable
Prepaid expenses Salary payable
Unearned rent revenue
Total assets Total equities