Question

The Prepaid Insurance account had a $8,000 debit balance at December 31 before adjusting for the costs of any expired coverage. An analysis of the company's insurance policies showed that $990 of unexpired insurance coverage remains. c. The Supplies account had a $440 debit balance at the beginning of the year, and $2,680 of supplies were purchased during the year. The December 31 physical count showed $519 of supplies available. d. One-fourth of the work related to $11,000 of cash received in advance was performed this period. e. The Prepaid Rent account had a $5,100 debit balance at December 31 before adjusting for the costs of expired prepaid rent. An analysis of the rental agreement showed that $4,110 of prepaid rent had expired. f. Wage expenses of $7,000 have been incurred but are not paid as of December 31 . Prepare adjusting journal entries for the year ended December 31 for each separate situation. Journal entry worksheet 56> Depreciation on the company's equipment for the year is computed to be $17,000. Note: Enter debits before credits.

Answer 1

A bank with reserves of $50, government bonds of $70, and loans of $500, against deposits of $400, has a net worth of $220. This is calculated by subtracting total liabilities from total assets.

Step-by-step explanation:

When constructing a T-account balance sheet for a bank, we list the bank's assets on one side and its liabilities on the other side. In this scenario, the bank's assets include reserves of $50, government bonds worth $70, and loans totaling $500. The liability of the bank is the deposits it holds, which amount to $400. To calculate the bank's net worth, also known as equity, we subtract the liabilities from the assets.

Assets:

• Reserves: $50
• Government Bonds: $70
• Loans: $500

Liabilities:

• Deposits: $400

To calculate the net worth: Total Assets - Total Liabilities = ($50 + $70 + $500) - $400 = $620 - $400 = $220. Therefore, the bank's net worth is $220.