Intermediate Accounting Homework

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TRADITIONAL HOMEWORK ITEMS 6-7 – FALL 2024 – ACT 3391
General Instructions for the Traditional Homework – refer to the instructions for traditional item
nos. 1 to 2.
6. (6 points) The income statement of Dolan Corporation for 2025 included the following items:
Insurance revenue
$141,000
Salaries and wages expense
210,000
Insurance expense
21,200
The following balances have been excerpted from Dolan Corporation’s balance sheets:
December 31, 2025
December 31, 2024
Insurance receivable
$18,200
$15,000
Salaries and wages payable
17,800
8,400
Prepaid insurance
2,200
3,000
Cash received for insurance during 2025 was
Cash paid for salaries and wages during 2025 was
The cash paid for insurance premiums during 2025 was
7. (4 points) Changes in all of E’s balance sheet accounts during the current year, EXCEPT the change
in E’s retained earnings account follow. Compute E’s net income (or net loss) for the year assuming
the only two entries E made to her retained earnings account during the year were for a cash dividend
declared and paid of $50,000 and her net income (or net loss) for the year. (This is NOT a statement
of cash flows problem – do NOT format it like a statement of cash flows problem.)
Cash decreased
Accounts receivable decreased
Inventory decreased
Prepaid insurance increased
Fixed assets increased
Accumulated depreciation increased
Accounts payable increased
Salaries payable decreased
Unearned revenue increased
Notes payable decreased
Common stock increased
$ 25,000
$ 15,000
$100,000
$ 12,000
$165,000
$ 90,000
$120,000
$ 65,000
$ 15,000
$ 50,000
$ 5,000
Additional paid-in-capital increased
$145,000