Question

Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012....

Wally’s Widget Company (WWC) incorporated near the end of 2011. Operations began in January of 2012. WWC prepares adjusting entries and financial statements at the end of each month. Balances in the accounts at the end of January are as follows:

  Cash $ 20,420 Unearned Revenue (35 units) $ 4,950   
  Accounts Receivable $ 11,450 Accounts Payable (Jan Rent) $ 2,500   
  Allowance for Doubtful Accounts $ (1,500) Notes Payable $ 16,000   
  Inventory (40 units) $ 3,600 Contributed Capital $ 6,200   
Retained Earnings – Feb 1, 2012 $

4,320

1. Prepare the financial statements at the end of February. (Balance Sheet only, items to be deducted must be indicated with a negative amount.)

2. Make a balance sheet

Homework Answers

Answer #1
Balance Sheet:
current assets:
Cash 20420
Accounts receivable 11450
Less: Allowance 1500 9950
Inventory 3600
Total assets 33970
Liabilities and Equity:
Unearned revenue 4950
Accounts payable 2500
Notes payable 16000
Total Liabilities 23450
Stockholder's equity
Contributed capital 6200
Retained earnings 4320
Total Stockholder's equity 10520
Total Liabilities and stockholder's equity 33970
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