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The POL Company had started its operations in 2016. The balance sheet for December 31, 2016,...

The POL Company had started its operations in 2016. The balance sheet for December 31, 2016, showed the following accounts balances (there were no other accounts listed):

Accounts receivables 45

Unearned revenue 40

Accumulated depreciation 10

Common stock 500

Retained earnings 57

Property plant and equipment (gross) 200

Inventory 75

Accounts payable 40

Cash 309

Prepaid rent ______

During 2017 the following transactions occurred:

1. POL purchased $375 worth of inventory on account.

2.Payments on Accounts payable were $365.

3.Cash sales were $260; credit sales were $360.

4.Ending inventory was $59.

5.Depreciation expense was $20.

6.Collections from customers (not including cash sales) were $312.

7. The Prepaid rent had expired during the year.

8. POL hired one employee, who worked for the entire year at $4 per month. At the end of the year, POL owes its employee $6.

9.Dividend of $24 was declared and paid during 2017.

10. On the last day of the year, POL gave a loan of $50 to its twin sister company, CLA.

11.Unearned revenue account remained intact during 2017.

a.What was the balance of the Prepaid rent account on December 31, 2016?

b.Record journal entries for all transactions occurred during 2017.

c.Prepare an Income Statement for the year ended December 31, 2017.

d. Prepare a Balance Sheet for December 31, 2017.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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