Transaction l. Paid dividends of $1,200 to stockholders (Dr. Landry).This transaction is
similar to the dividends transactions of September and October. It is recorded as
shown on the next page.Transaction j. Paid $100 on account for supplies that had been purchased.This transac-
tion reduces the cash and the accounts payable by $100, as shown below.Transaction k. Expenses paid during November were as follows: wages, $2,790; rent,
$800; utilities, $580; interest, $100; and miscellaneous, $420.This transaction is similar to
the expense transaction that we recorded for Family Health Care in September and
October. It is recorded as shown below.104 Chapter 3 Accrual Accounting Concepts
Balance Sheet
Assets Liabilities Stockholders’ Equity
Accts. Prepaid Office Notes Accts. Unearned Capital Retained
Cash Rec. Insur.Supp.Equip.LandPay.Pay.RevenueStockEarnings
13,720 1,900 8 ,400 240 8 ,500 12,000 16, 800 240 1, 800 11,000 14,920
100 100
13,620 1,900 8 ,400 240 8 ,500 12,000 16, 800 140 1, 800 11,000 14,920Statement of Cash Flows
j. Operating 100Statement of
Cash FlowsIncome
StatementIncome StatementBalances
j. Paid on account
BalancesBalance Sheet
Assets Liabilities Stockholders’ Equity
Accts. Prepaid Office Notes Accts. Unearned Capital Retained
Cash Rec. Insur.Supp.Equip.LandPay.Pay.RevenueStockEarnings
13,620 1,900 8 ,400 240 8 ,500 12,000 16, 800 140 1, 800 11,000 14,920
4,690 4,690
8 ,930 1,900 8 ,400 240 8 ,500 12,000 16, 800 140 1, 800 11,000 10,230Statement of Cash Flows
k. Operating 4,690Statement of
Cash FlowsIncome
StatementIncome Statement
k.2,790 Wages expense
8 00 Rent expense
58 0 Utilities expense
100 Interest expense
420 Misc. expenseBalances
k. Paid expenses
Balancesk.Q.Assume that you cancel
a $300 airline ticket that,
though nonrefundable, may
be applied to another ticket
within one year. When
should the airline transfer
the $300 from unearned
revenue to revenue?A.After one year, or
when the $300 is applied
to another ticket and you
use that ticket.