Question

On December 31, Krug Company reported stockholders’ equity of $280,000 prior to the following adjusting entries:Depreciation expense: $31,000.Accrued service revenues: $29,000.Accrued expenses: $12,000.Used insurance: $9,000; the insurance was initially recorded as prepaid.Rent revenue earned; $7,000; the rent was initially prepaid by the tenant and credited to unearned rent revenue.How much is Krug’s stockholders’ equity after adjusting entries?A. $280,000.B. $262,000.C. $295,000.D. $264,000.

Answer 1

D. $264,000.

Step-by-step explanation:

Stockholders equity = $280,000 - $31,000 + $29,000 - $12,000 - $9,000 + $7,000

= $264,000

Therefore, Krug’s stockholders’ equity after adjusting entries is $264,000.