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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Winters Landscape Services accrued \(4,000 of Salaries Expense at December 31. Winters paid the next payroll at January 10 of
\)6,000. This payment included the accrued amount at December 31, plus $2,000 for the first few days of January.
24A. Record the reversing entry.
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
For each account listed, identify whether the account is a temporary account (T) or a permanent account (P). a. Rent Expense b. Prepaid Rent c. Equipment d. Common Stock e. Salaries Payable f. Dividends g. Service Revenue h. Supplies Expense i. Office Supplies.
What does the income statement report?
For each account listed, identify the category in which it would appear on a classified balance sheet.
2. Mortgage Payable (due in five years)
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