Mountain View Apartments (MVA), Inc.’s records show the
following information as of December 31, the end of the current
year:
Rent
- MVA collected $500,000 rent in cash from tenants during the
current year for occupancy during the current year.
- $10,000 of tenants’ current-year December rent will be
collected in January of next year.
- Some tenants prepaid their January rent in December of the
current year, in the amount of $14,000.
Salaries
- In January of the current year, MVA paid employees $6,000 for
work done in the prior year.
- During the current year, MVA paid employees $70,000 for work
done in the current year.
- At the end of the current year, MVA owed employees $3,000 for
work performed in December that will be paid in January of next
year.
Supplies
- MVA keeps certain maintenance supplies on hand. The amount of
supplies on hand on January 1 of the current year was $7,000, and
an additional $8,000 of supplies were purchased during the current
year.
- At the end of the current year, $2,000 of supplies remained on
hand.
Requirements
- Calculate the December 31 balances for the accounts shown in
the table below and insert them in the table. The December 31
balances are the final balances for the year, after adjusting
entries but before closing entries (as you would see them in the
adjusted trial balance). Below the table, show your calculations
and briefly explain them.
- In the same table, indicate with a Y (Yes) or N (No) if the
account balance would be reported in the income statement or
balance sheet.
- Calculate the cash flows shown in the second table and enter
the amounts in the table. Show cash inflows as positive amounts and
cash outflows as negative amounts. Again, show your calculations
and briefly explain them.
Account
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December 31 Balance
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Reported on Income Statement?
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Reported on Balance Sheet?
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Rent Receivable
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Maintenance Supplies
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Unearned Rent Revenue
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Salaries Payable
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Rent Revenue
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Salaries Expense
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Maintenance Supplies Expense
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