Question

On January 1, 2021, the general ledger of Dynamite Fireworks includes the following account balances:

Accounts	Debit				Credit
Cash	$	25,500
Accounts Receivable		6,900
Supplies		4,800
Land		67,000
Accounts Payable					$	4,900
Common Stock						82,000
Retained Earnings						17,300
Totals	$	104,200			$	104,200

During January 2021, the following transactions occur:

January		2		Purchase rental space for one year in advance, $11,100 ($925/month).
January		9		Purchase additional supplies on account, $5,200.
January		13		Provide services to customers on account, $27,200.
January		17		Receive cash in advance from customers for services to be provided in the future, $5,400.
January		20		Pay cash for salaries, $13,200.
January		22		Receive cash on accounts receivable, $25,800.
January		29		Pay cash on accounts payable, $5,700.

Prepare a classified balance sheet as of January 31, 2021.

Answer 1

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Workings for Balance Sheet			Classified Balance Sheet as at 31st January 2021:
Rental space paid for 1 year	11,100.00		Assets	Amount ($)
Rental expense for January	925.00		Current assets
Prepaid Rent	10,175.00		Cash	26,700.00
			Accounts Receivable	8,300.00
Supplies Opening Balance	4,800.00		Supplies	10,000.00
Additional purchase	5,200.00		Prepaid Rent	10,175.00
Supplies Closing Balance	10,000.00		Total current assets	55,175.00
Accounts Payable			Fixed assets
Opening Balance	4,900.00		Land	67,000.00
Supplies purchased	5,200.00		Total non-current assets	67,000.00
Cash paid	(5,700.00)		Office equipment
Closing Balance	4,400.00		Total assets	122,175.00
Accounts Receivable			LIABILITIES AND EQUITY
Opening Balance	6,900.00		Current liabilities
Services provided	27,200.00		Accounts Payable	4,400.00
Cash paid	(25,800.00)		Advance received from customers	5,400.00
Closing Balance	8,300.00		Total current liabilities	9,800.00
Cash			Long-term liabilities	-
Opening Balance	25,500.00
Rental Paid	(11,100.00)		Total liabilities	9,800.00
Advance received from customers	5,400.00
Salaries paid	(13,200.00)		Shareholders’ Equity
Received from accounts receivable	25,800.00		Capital	82,000.00
Paid to accounts payable	(5,700.00)		Retained earnings	30,375.00
Closing Balance	26,700.00		Total equity	112,375.00
Retained Earnings			Total liabilities and equity	122,175.00
Opening Balance	17,300.00
Services provided	27,200.00
Salaries paid	(13,200.00)
Rent Expense	(925.00)
Closing Balance	30,375.00