Exercise 2–4 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Cash ...................................................................... Common stock ................................................... Furniture and fixtures ........................................... Cash.................................................................... Note payable ..................................................... Inventory .............................................................. Accounts payable ............................................... Accounts receivable ............................................. Sales revenue ..................................................... Cost of goods sold ................................................ Inventory ............................................................ Rent expense......................................................... Cash.................................................................... Prepaid insurance ................................................. Cash.................................................................... Accounts payable ................................................. Cash.................................................................... Cash ...................................................................... Accounts receivable ........................................... Retained earnings ................................................. Cash.................................................................... Depreciation expense ........................................... Accumulated depreciation ................................. Insurance expense ($3,000 ÷ 12 months) .................. Prepaid insurance ............................................... 500,000 100,000 200,000 280,000 140,000 6,000 3,000 120,000 55,000 5,000 2,000 250 500,000 40,000 60,000 200,000 280,000 140,000 6,000 3,000 120,000 55,000 5,000 2,000 250 2– Solutions Manual, Vol.1, Chapter 2 17