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Chapter 4: Q3RQ (page 216)
What does the statement of retained earnings show?
Statement of retained earnings shows change in the retained earnings accounts due to net income (or net loss), and dividends.
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What does liquidity mean?
For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR)
Dalton Hair Stylists’s adjusted trial balance follows. Prepare Dalton’s income statement for the year ended December 31, 2018. DALTON HAIR STYLISTS Adjusted Trial Balance December 31, 2018 Account Title Office Supplies Cash Debit Credit Accounts Receivable Equipment Accumulated Depreciation—Equipment Accounts Payable Interest Payable Notes Payable Common Stock Dividends Service Revenue Rent Expense Supplies Expense Depreciation Expense—Equipment Interest Expense Balance \( 1,300 \) 36,150 \( 36,150 400 \) 2,200 3,100 500 1,400 16,150 13,800 3,900 850 2,200 2,300 1,500 1,800 20,900 Total.
How could a worksheet help in preparing financial statements?
Benson Auto Repair has the following account balances at December 31, 2018, from its adjusted trial balance. Compute
Benson Auto Repair’s current ratio.
Cash \( 4,000 Common Stock \) 20,000
Accounts Receivable 3,200 Retained Earnings 15,700
Prepaid Rent 1,900 Dividends 2,100
Office Supplies 3,000 Service Revenue 1,600
Equipment 34,800 Depreciation Expense—Equipment 300
Accumulated Depreciation—Equipment 1,600 Salaries Expense 800
Accounts Payable 5,400 Rent Expense 500
Notes Payable (long-term) 7,000 Utilities Expense 600
Supplies Expense 100
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