Ramsey Corporation, Right Way Lumber, Designers Inc., Utopia Dance Clubs

1. Ramsey Corporation reported the following accounts and balances in its financial statements:

Cash $35,000

Inventory $10,200

Equipment $19,500

Accounts Payable $16,350

Contributed Capital $30,000

Retained Earnings $18,350

Arrange the accounts and balances into the accounting equating using the following equation and then answer the following questions.

Assets=liabilities + owner s equity What is the total amount of assetsWhat is the total amount of liabilities?What is the total amount of owner s equity?

2. After six months of operations, Right Way Lumber had the following revenues and expense balances:

Supplies expense 11,000

Service revenue 62,090

Utilities expense 6,200

Rent expense 14,700

Wages expense 13, 330.

Prepare an income statement in its proper format ending on june 30, 2009.

3. Jim Smith had trouble finding a job, so he decided to start his own sole proprietyship by the name of Designers Inc. Jim is a web site designer, and here are the results as of the end of the first year of his businesss

Accounty payabe $12,100
Cash 19,150
Service revenue 20,000
Contributed capital 21,000
Wage expense 4,100
Inventory 4,445
Rent expense 5,000
Equipment 16,325
Supplies 4,080
Retained earnings 6,820

4. Utopia Dance Clubs, Inc., rented an old warehouse for its newest club on October 1, 2010. To receive a discount, Utopia paid $ 11,700 for 18 months of rent in advance. Assume no additional rent is paid in 2011 and 2012 and answer the following questions:

a. How much rent expense will be recognized for the year ended December 31, 2010

b. What will be the balance in the prepaid rent account at December 31, 2010?

c. How much rent expense will be recognized for the year ended December 31, 2011?

d. What will be the balance in the prepaid rent account of December 31, 2011?

e. How much rent expense will be recognized for the year ended December 31, 2012?

f. What will be the balance in the prepaid rent account at December 31,2012?

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