Reference no: EM132917261

Question -

1. John Doe invested $50,000 to begin Impakt Solutions and the business issues common stock to the stockholders.

2. John Doe purchases land for a new location and pays cash of $25,000.

3. The business buys Equipment on account, agreeing to pay $2,000 within 30 days.

4. Impakt Solutions earns $5,000 of service revenue by providing services for customers. The business collects the cash.

5. Impakt Solutions performs service on account, which means that Impakt Solutions lets some customers pay later. Impakt Solutions earns revenue but doesn't receive the cash immediately. In transaction 5, Impakt Solutions Provides service, and EY promises to pay Impakt Solutions $2,500 within 1 month.

6. During the month, Impakt Solutions pays $2,875 for the following expenses: equipment $1,125; employee salaries $1,250; and utilities, $500.

7. Impakt Solutions pays $1,900 on account, which means to pay off an account payable. In this transaction Impakt Solutions pays the store from which it purchased supplies in transaction 3.

8. In transaction 5, Impakt Solutions performed services for EY on account. The business now collects $1,000 from EY. We say that Impakt Solutions collects the cash on account, which means that Impakt Solutions will record an increase in Cash and a decrease in Accounts Receivable.

9. Impakt Solutions sells some land for $40,000, which is the same amount that Impakt Solutions paid for the land. Impakt Solutions receives $40,000 cash.

10. Impakt Solutions declares a dividend and pays the stockholders $2,500 cash.

Required - For each case, follow the 3-step process for adjusting the unearned revenue, adjusting the accrued expense account liability account at December 31,

Determine what the current accounts balance equals,

Determine what the current account balance should equal.