Accounting-Required in Excel
Question 1: The DEF Company
The DEF Company had started its operations in 1994. The balance sheet for December 31,
1994, showed the following accounts balances (there were no other accounts listed):
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Accounts receivable 45, Advances from customers 40, Accumulated depreciation
10, Paid in capital 500, Retained earnings 57, Property plant and equipment
(gross) 200, Inventory 75, Accounts payable 40, Cash 309, Prepaid rent (?).
During the 1995 the following transactions occurred:
1. DEF purchased $375 worth of inventory on account.
2. Payments on Accounts payable were $365.
3. Cash sales were $260; credit sales were $360.
4. Ending inventory was $59.
5. Depreciation expense was $20.
6. Collections from customers (not including cash sales) were $312.
7. The Prepaid rent had expired during the year.
8. DEF hired one employee, who worked for the entire year at $4 per month. At the end of
the year DEF owes its employee $6.
9. Dividend of $24 was declared and paid during 1995.
10. On the last day of the year, DEF gave a loan of $50 to its twin sister company, ABC.
11. Advances from customers account remained intact during 1995.
a. What was the balance of the Prepaid rent account on December 31, 1994?
b. Record journal entries for all transactions occurred during 1995. (You may use T accounts,
or the Accounting Equation worksheet.)
c. Prepare an Income Statement for the year ended December 31, 1995.
d. Prepare a Balance Sheet for December 31, 1995.
e. Prepare a Statement of Cash Flows for the year ended December 31, 1995.