A. Paid $6,400 cash in advance on October 1 for a one-year insurance policy. B.
ID: 2402853 • Letter: A
Question
A. Paid $6,400 cash in advance on October 1 for a one-year insurance policy.
B. Received an $5,200 cash advance for a contract to provide services in the future. The contract required a one-year commitment, starting April 1.
C. Purchased $2,000 of supplies on account. At year’s end, $255 of supplies remained on hand.
D. Paid $11,520 cash in advance on August 1 for a one-year lease on office space.
The Accounting Equation Event/ Adjustment Total Assets = Liabilities + Stockholders’ Equity Cash + Other Assets Common Stock + Retained Earnings a. + = + + a. Adj. + = + + b. + = + + b. Adj. + = + + c. + = + + c. Adj. + = + + d. + = + + d. Adj. + = + +Explanation / Answer
The Accounting Equation Event/ Adjustment Total Assets = Liabilities + Stockholders’ Equity Cash + Other Assets Common Stock + Retained Earnings a. -6400 + 6400 = + + a. Adj. + -1600 = + + -1600 b. 5200 + = 5200 + + b. Adj. + = -3900 + + 3900 c. + 2000 = 2000 + + c. Adj. + -1745 = + + -1745 d. -11520 + 11520 = + + d. Adj. + -4800 = + + -4800