Question

On December 31, 2019, Krug Company prepared adjusting entries that included the following items:

Depreciation expense: $51,000;

Accrued sales revenue: $49,000;

Accrued expenses: $26,000;

Used insurance: $5,000; the insurance was initially recorded as prepaid.

Rent revenue earned: $3,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue.

If Krug Company reported stockholders' equity of $390,000 prior to the adjusting entries, how much is Krug's stockholders' equity after the adjusting entries?

Multiple Choice

A)$360,000.

B)$411,000.

C)$390,000.

D)$380,000.

Answer 1

Adjusting entries
Income
Accrued sales revenue	$           49,000
Rent revenue earned	$             3,000
Less:
Expenses
Depreciation expense	$           51,000
Accrued expenses	$           26,000
Used insurance	$             5,000
Net effect on net income	$         -30,000
Shreholders equity = $390000 -30000
=$360000
Correct Option : A)$360,000.
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