Question
The following financial statements were prepared at the end of the month of May: TOPS IN TOPIARY - INCOME STATEMENT FOR the month of May
The following financial statements were prepared at the end of the month of May:
TOPS IN TOPIARY - INCOME STATEMENT FOR the month of May
Revenue$2,540Expenses:Rent Expense$500Advertising Expense$500Wages Expense$200$1,200Net Income$1,340
TOPS IN TOPIARY - STATEMENT OF OWNER'S EQUITY FOR the month of MAY
Owner's Equity at May 1$0plus: Investment2,000plus: Net Income1,340less: Withdrawals0Owner's Equity at May 31$3,340
TOPS IN TOPIARY - BALANCE SHEET AS OF MAY 31
ASSETSLIABILITES AND OWNER'S EQUITYCurrent Assets:Current Liabilities:Cash$1,380Accounts Payable$300Accounts Receivable$1,500Advertising Payable$500Prepaid Rent$ 500Advances from Customers$200Prepaid Advertising$ 500Supplies$ 100$3,980Equipment$ 360Owner's Equity$3,340Total Assets$4,340Total Liabilities & OE$4,340
During June the following transactions occurred:
1) Paid the helper the $1,000 owed from works done in May (the amount owed is in Accounts Payable).
2) Completed the job for which the customer paid $200 in May. Tops in Topiary collected $2000 in cash once finished.
3) Paid $500 for the rent of July.
4) At the end of June notices that there are no supplies left. Makes a note to buy some in July.
5) At the end of June notices that there are few flyers left (used for advertising) worth $200 and decides to order some for July. Before ordering, the printer (supplier of flyers) asks to be paid $600 of the amount owed for the flyers done in May. Tops in Topiary pays $600.
6) In June collected in cash $3,000 for 3 jobs are done for a total of $4,500, the rest is owed in account by the customers.
7) In June decided to start depreciating the equipment bought for $360 that is expected to last for 3 years.
8) In June 23rd Edward Scissorhands withdrew some cash for personal reasons ($2,000).
Prepare "T" Accounts in ACCRUAL Basis for the period ended on June 30th and then answer the questions.
At the end of the accounting period (June 30th, T account after AJE), what is the balance of Rent Expense?
$250
$0
$1,000
$500
None of the others alternatives are correct
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