3-20E - Horngren'S Financial And Managerial Accounting

Question

Question :Consider the facts presented in the following table for Tropical View:Beginning Prepaid Rent Payments for Prepaid Rent during the year Total amount to account for Subtract: Ending Prepaid Rent Rent Expense Situation A B C D \(1,400 700 2,100 800 \) a \(1,000 1,600 700 \)900 b \( 200 1,800 \)1,900 c d \( 700 f e 600 \)1,000Complete the table by filling in the missing values.

Step-by-Step Solution

Answer

	Situation
	A	B	C	D
Beginning Prepaid Rent	$1,400	$1,000	$200	$700
Payments for Prepaid Rent during the year	700	600	1,800	900
Total amount to account for	2,100	1,600	2,000	$1,600
Subtract: Ending Prepaid Rent	800	700	100	600
Rent Expense	$1,300	$900	$1,900	$1,000

Step-by-Step-Solution Step1: Calculation of Rent Expense

(a) Rent expense is calculated as follows: 

$$\begin{gathered} \mathbf{RentExpense}\mathbf{=}\mathbf{TotalAmounttobeAccountfor}-\mathbf{EndingPrepaidRent} \\ \mathbf{=}\mathbf{\$}\mathbf{2}\mathbf{,}\mathbf{100}-\mathbf{\$}\mathbf{800} \\ \mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{300} \end{gathered}$$

Step 2: Calculation of Payment for Prepaid Rent

(b) Payment for prepaid rent is calculated as follows: 

$$\begin{gathered} \mathbf{PaymentforPrepaidRent}\mathbf{=}\mathbf{TotalAmounttobeAccountfor}-\mathbf{BeginningPrepaidRent} \\ \mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{600}-\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{000} \\ \mathbf{=}\mathbf{\$}\mathbf{600} \end{gathered}$$

Step 3: Calculation of total amount to be accounted for

(c) Total amount to be accounted for is calculated as follows: 

$$\begin{gathered} \mathbf{TotalAmounttobeAccountfor}\mathbf{=}\mathbf{BeginningPrepaidRent}+\mathbf{PaymentforPrepaidRent} \\ \mathbf{=}\mathbf{\$}\mathbf{200}+\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{800} \\ \mathbf{=}\mathbf{\$}\mathbf{2}\mathbf{,}\mathbf{000} \end{gathered}$$

Step 4: Calculation of ending prepaid rent

(d) Ending prepaid rent is calculated as follows: 

$$\begin{gathered} \mathbf{EndingPrepaidRent}\mathbf{=}\mathbf{TotalAmounttobeAccountfor}-\mathbf{RentExpense} \\ \mathbf{=}\mathbf{\$}\mathbf{2},\mathbf{000}-\mathbf{\$}\mathbf{1},\mathbf{900} \\ \mathbf{=}\mathbf{\$}\mathbf{100} \end{gathered}$$

Step 5: Calculation of total amount to be accounted for

(d) Total amount to be accounted for is calculated as follows: 

$$\begin{gathered} \mathbf{TotalAmounttobeAccountfor}\mathbf{=}\mathbf{RentExpense}+\mathbf{EndingPrepaidRent} \\ \mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{000}+\mathbf{\$}\mathbf{600} \\ \mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{600} \end{gathered}$$

Step 6: Calculation of Payment for Prepaid Rent

(b) Payment for prepaid rent is calculated as follows: 

$$\begin{gathered} \mathbf{PaymentforPrepaidRent}\mathbf{=}\mathbf{TotalAmounttobeAccountfor}-\mathbf{BeginningPrepaidRent} \\ \mathbf{=}\mathbf{\$}\mathbf{1}\mathbf{,}\mathbf{600}-\mathbf{\$}\mathbf{700} \\ \mathbf{=}\mathbf{\$}\mathbf{900} \end{gathered}$$