Exercise 2–3 BALANCE SHEET ACCOUNTS Cash Accounts receivable ____________________________ ____________________________ 3/1 Bal. 1. 8. 3/31 Bal. 0 300,000 55,000 10,000 5,000 6,000 70,000 _______________ 2. 5. 3/31 Bal. 65,000 0 3/31 Bal. 20,000 4. Equipment ____________________________ 3/1 Bal. 2. 0 40,000 _______________ 3/31 Bal. 40,000 8. ______________ Prepaid insurance ____________________________ 3/1 Bal. 70,000 90,000 _______________ 55,000 6. 264,000 3. 7. 0 120,000 7. Inventory ____________________________ 3/1 Bal. 3/1 Bal. 4. 6. 0 6,000 ______________ 3/31 Bal. 6,000 Accumulated depreciation ____________________________ 0 1,000 ______________ 3/1 Bal. 9. 1,000 3/31 Bal. Accounts payable ____________________________ Note payable ____________________________ 0 90,000 70,000 _______________ 3/1 Bal. 3. 0 30,000 ______________ 3/1 Bal. 2. 20,000 3/31 Bal. 30,000 3/31 Bal. Common stock ____________________________ 0 300,000 _______________ 3/1 Bal. 1. 300,000 3/31 Bal. 2– Solutions Manual, Vol.1, Chapter 2 15 Exercise 2–3 (concluded) INCOME STATEMENT ACCOUNTS Sales revenue ___________________________ 0 120,000 _______________ 3/1 Bal. 4. 3/1 Bal. 4. 0 70,000 ______________ 120,000 3/31 Bal. 3/31 Bal. 70,000 Rent expense ___________________________ 3/1 Bal. 5. 3/31 Bal. 0 5,000 _______________ 5,000 Account Title Cash Accounts receivable Inventory Prepaid insurance Equipment Accumulated depreciation Accounts payable Note payable Common stock Sales revenue Cost of goods sold Rent expense Depreciation expense Totals 2–16 Cost of goods sold ___________________________ Depreciation expense ___________________________ 3/1 Bal. 9. 0 1,000 ______________ 3/31 Bal. 1,000 Debits 264,000 65,000 20,000 6,000 40,000 70,000 5,000 1,000 471,000 Credits 1,000 20,000 30,000 300,000 120,000 ______ 471,000