The following general equation can be used to determine missing information about balance sheet accounts: Use this
Question:
The following general equation can be used to determine missing information about balance sheet accounts:
Use this equation to determine the missing information in each of the following independent situations. For each case assume that the year-end is June 30. You can also use an accounting equation spreadsheet to determine the missing information.
a. On June 30, 2015, Zincton Ltd. (Zincton) reported \($75,000\) of prepaid rent.
During fiscal 2015 Zincton had a rent expense of \($525,000\) and paid \($600,000\) to the owners of the property it rented. How much prepaid rent did Zincton report on July 1, 2014?
b. Winsloe Inc. (Winsloe) had \($500,000\) and \($425,000\) of accounts receivable on July 1, 2014 and June 30, 2015 respectively. During fiscal 2015 Winsloe had \($3,750,000\) in credit sales. How much cash did Winsloe collect from customers during fiscal 2015?
c. Union Inc. (Union) capitalizes its store opening costs and amortizes them over five years. On July 1, 2014 Union had \($125,000\) in unamortized store opening costs and on June 30, 2015 the balance was \($285,000\). During fiscal 2015 the amortization expense for store opening costs was \($30,000\). What amount of store opening costs did Union capitalize during fiscal 2015? Assume that Union doesn’t have a separate contra-asset account for accumulating amortization for this account.
d. On July 1, 2014 Sawbill Ltd. (Sawbill) had unearned revenue \($1,275,000\). During fiscal 2014 Sawbill received \($975,000\) in advances from customers and recognized \($1,445,000\) of unearned revenue as revenue. How much unearned revenue did Sawbill have June 30, 2015?
e. Otter Inc. (Otter) purchases all of its inventory on credit. On July 1, 2014 Otter had \($250,000\) of inventory on hand and on June 30, 2015 it had \($310,000\) of inventory.
Cost of goods sold during fiscal 2015 was \($1,375,000\). On July 1, 2014 the balance in Otter’s accounts payable account was \($215,000\) and during fiscal 2015 Otter paid suppliers \($1,510,000\). How much did Otter owe its suppliers on June 30, 2015?
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