1. Group 4 P9-5

2. A. Debit Credit Wages expense (+E, -SE)....... $3,600 Wages payable (+L)..………… $3,600 Wages payable (+L)..………… $3,600 Stockholders Stockholders Date Assets = Liabilities + Equity 12/31/07 NE + 3,600 - 3,600

3. B.) Debit Credit Wages payable (-L)………….. $3,600 Cash (-A)……………………………… 3,600 Stockholders Stockholders Date Assets = Liabilities + Equity 1/08 -3,600 -3,600 NE

4. C. Debit Credit Cash (+A)………………………. $2,400 Unearned Revenue (+L)……………… $2,400 Unearned Revenue (+L)……………… $2,400 Stockholders Stockholders Date Assets = Liabilities + Equity 12/10/07 +2,400 +2,400 NE

5. D) Debit Credit Unearned revenue (-L)………. $1,600 Unearned revenue (-L)………. $1,600 Rent revenue (+R, +SE)…………… $1,600 Rent revenue (+R, +SE)…………… $1,600 Stockholders Stockholders Date Assets = Liabilities + Equity 12/31/07 NE -1,600 +1,600

6. 2.) Accrual basis accounting has more relevant information for financial analysts that cash basis accounting because it is not only based on cash in and cash out but also on future revenue and future expenses such as account receivables and payables. It also shows money that is in transit that the cash basis accounting does not.