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1. (5 points) Zena Company’s financial records showed the following selected items for 2014:
Advertising receipts $560,000 Land rental revenues $250,000
Interest paid on borrowings $100,000 Wage expense $190,000
2. Zena follows the accrual basis of accounting. The following balances were taken from Zena’s balance sheets:
12-31-14 12-31-13
Advertising receivables 20,000 15,000
Prepaid advertising costs 50,000 44,000
Wages payable 18,000 25,000
Interest payable 60,000 56,000
Unearned land rental revenue 63,000 60,000
What were advertising-related revenues for 2014?
What was interest expense for 2014?
How much cash was paid out for wages and salaries during 2014?
How much cash was collected for land rentals during 2014?
Expert Answer
Advertising revenue for 2014 : $ 565,000.
Interest expense for 2014 : $ 104,000.
Cash paid for wages and salaries during 2014: $ 197,000
Cash collected for land rentals during 2014 : $ 247,000
T Accounts :
Advertising Revenue :
| Debit | Credit | |
| Beginning balance | 15,000 | |
| Cash | 560,000 | |
| Advertising Revenue | 565,000 | |
| Ending balance | 20,000 |
Interest Payable :
| Debit | Credit | |
| Beginning balance | 56,000 | |
| Interest expense | 104,000 | |
| Cash | 100,000 | |
| Ending balance | 60,000 |
Wages Payable :
| Debit | Credit | |
| Beginning balance | 25,000 | |
| Wage Expense | 190,000 | |
| Cash ( Balancing Figure ) | 197,000 | |
| Ending balance | 18,000 |
Unarned land rental revenue :
| Debit | Credit | |
| Beginning balance | 63,000 | |
| Land rental revenue | 250,000 | |
| Cash | 247,000 | |
| Ending balance | 60,000 |
