In Class Activity 1

Activity #1 (2 or more errors will result in 3 points)

Identify whether each item would appear on the balance sheet (BS) or the income statement (IS)

Cash Equipment
Rent Expense Insurance Expense
Accounts Receivable Supplies Expense
Unearned Revenue Supplies
Sales Revenue Retained Earnings

Identify each item as an “Asset”, “Liability” or “Equity” Account

Common Stock Wages Payable
Accounts Payable Inventory
Land Notes Payable
Prepaid Insurance Supplies
Unearned Revenue Retained Earnings

If assets increased by $5,000 and liabilities decreased by $2,000 then how much did stockholder’s equity increase to keep the accounting equation in balance?

Calculate the balance of retained earnings at the end of each year:

Year Beginning balance Net income Dividends Retained Earnings
1 $0 $1,200 $500
2 1,700 500
3 2,100 1,000 (Note: Year 1 ending balance will be the year 2 beginning balance)
Use the following information for Beetles Company to prepare an income statement and statement of retained earnings for 2012 (you will not use all accounts)
Accounts payable 33,000 Notes payable 70,000
Accounts receivable 38,000 Rent Expense 35,000
Advertising expense 36,000 Retained earnings (beginning) 10,000
Cash 75,000 Service Revenue 460,000
Common Stock 98,000 Supplies 2,000
Dividends 3,000 Supplies Expense 14,000
Equipment 118,000 Wages Expense 198,000
Insurance Expense 48,000 Wages Payable 60,000

Beetles Company
Income Statement
For the year ended December 31, 2012

Beetles Company
Statement of Retained Earnings
For the year ended December 31, 2012

EACH MEMBER OF TODAY’S GROUP SHOULD SIGN AND