Finnish Motors has the following balance sheet accounts: $$\begin{array} { l r }
\text { Land } & \$ 150,000 \
\text { Equipment } & 90,000 \
\text { Salaries Payable } & 12,000 \
\text { Notes Payable } & 99,000 \
\text { Supplies } & 10,000 \
\text { Cash } & 25,000 \
\text { Common Stock } & 40,000 \
\text { Retained Earnings } & 100,000 \
\text { Accounts Payable } & ? \
\text { Prepaid Rent } & ?
\end{array}$$ If the company has total liabilities and stockholders' equity of $290,000, what is the balance of the company's Prepaid Rent account?

Question

Finnish Motors has the following balance sheet accounts: $$\begin{array} { l r } 
\text { Land } & \$ 150,000 \
\text { Equipment } & 90,000 \
\text { Salaries Payable } & 12,000 \
\text { Notes Payable } & 99,000 \
\text { Supplies } & 10,000 \
\text { Cash } & 25,000 \
\text { Common Stock } & 40,000 \
\text { Retained Earnings } & 100,000 \
\text { Accounts Payable } & ? \
\text { Prepaid Rent } & ?
\end{array}$$ If the company has total liabilities and stockholders' equity of $290,000, what is the balance of the company's Prepaid Rent account?

Quizplus · Accepted Answer

Total liabilities and stockholders' equity = $290,000Total liabilities = Notes Payable + Accounts Payable + Salaries Payable = $99,000 + Accounts Payable + $12,000Total stockholders' equity = Common Stock + Retained Earnings = $40,000 + $100,000 = $140,000Accounts Payable = Total liabilities and stockholders' equity - Total liabilities - Total stockholders' equityAccounts Payable = $290,000 - ($99,000 + Accounts Payable + $12,000) - $140,000Accounts Payable = $290,000 - $111,000 - Accounts Payable - $140,0002 * Accounts Payable = $39,000Accounts Payable = $19,500Prepaid Rent = Total assets - Total liabilities - Total stockholders' equityPrepaid Rent = ($150,000 + $90,000 + $10,000 + $25,000) - ($99,000 + $19,500 + $12,000) - $140,000Prepaid Rent = $275,000 - $130,500 - $140,000Prepaid Rent = $4,500

Finnish Motors Has the Following Balance Sheet Accounts If the Company Has Total Liabilities and Stockholders' Equity of l