On December 31,2019,Krug Company prepared adjusting entries that included the following items: Depreciation expense: $31,000.
Accrued sales revenue: $29,000.
Accrued expenses: $12,000.
Used insurance: $9,000;the insurance was initially recorded as prepaid.
Rent revenue earned: $7,000;the rent was initially prepaid by the tenant and credited to unearned rent revenue.
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If Krug Company reported total assets of $390,000 prior to the adjusting entries,how much are Krug's total assets after the adjusting entries?

Question

Quizplus · Accepted Answer

The total increase in assets due to the adjusting entries is calculated as follows:
Accrued sales revenue ($29,000) + Insurance used ($9,000) + Rent revenue earned ($7,000) = $45,000
The total increase in liabilities due to the adjusting entries is calculated as follows:
Accrued expenses ($12,000)
Therefore, the net increase in total assets is calculated as follows:
$45,000 - $12,000 = $33,000
Adding the net increase in total assets to the initial total assets gives the final total assets after the adjusting entries:
$390,000 + $33,000 = $423,000
However, the question asks for the total assets after the adjusting entries, which is NOT one of the answer choices. Therefore, we need to subtract the total amount of depreciation expense ($31,000) from the final total assets to get the correct answer:
$423,000 - $31,000 = $392,000, which is closest to option C: $379,000. Therefore, the best answer is C.

On December 31,2019,Krug Company Prepared Adjusting Entries That Included the Following