ACCT B6001: Accounting 1: Financial Accounting: Complete Solutions to Problem Set 5 (2025/2026 Edition | Bonds, Leases & Long-Term Liabilities Mastery!)

B6001 – Accounting 1 – Financial Accounting



SOLUTION TO PROBLEM SET 5

Question 1. KLM

a. Balance Sheet for December 31, 2022.
Assets Liabilities
Cash 594 Accounts payable 161
Accounts receivables 129
Pre paid rent 12
Inventory 49 Wages payable 4
Loan to ABC 35 165
PP&E 200 Owner’s Equity
Accumulated depreciation (50) 150 Paid in capital 500
Retained earnings 304
Total Assets 969 Total Liabilities and Owner Equity 969

b. Journal entries:
1. dr. Cash 753
cr. Accounts receivable 753
2. dr. PP&E 250
cr. Cash 250
3. dr. COGS 656
cr. Inventory 656
4. dr. Accounts receivable 777
cr. Sales revenues 777
5. dr. Marketing expenses 25
cr. Cash 18
cr. Accounts payable 7 (a separate account is also correct)
6. No entry.
7. dr. Inventory 666
cr. Accounts payable 666
8. dr. Wages expense 48
cr. Wages payable 6
cr. Cash 42
9. dr. Accounts payable 777
cr. Cash 777



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, 10. dr. Depreciation expense 30
cr. Accumulated depreciation 30
11. dr. Rent expense 39
cr. Cash 30
cr. Prepaid rent 9
12. dr. Interest receivables 5
cr. Interest income 5
13. dr. Dividends (Retained earnings) 48
cr. Dividend payable 48
14. dr. Cash 50
cr. Loan from Bank 50




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This study source was downloaded by 100000900629999 from CourseHero.com on 10-31-2025 04:37:24 GMT -05:00


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