Question

w o ws Dace of $900. A count of supplies revealed $400 on hand. B) The $1,200 premium relating to a one-year insurance policy was paid on December 1, 2016. C) The company's equipment, which was purchased last year, depreciates at a rate of $1,000 per year. D) On September 30, 2016, a customer paid $10,000 in advance for services, as of December 31, 2016. Services in the amount of $3,000 had been performed for this customer. E) Employees are paid $5,000 on Fridays for the 5-day workweck, which ends on Friday. However, December 31, 2016 falls on a Thursday. Record the wage expense for the 4 days in December Required: Prepare the required adjusting entries required at December 31, 2016. A blank journal page is included for your answer. (6 points) Exercise 3 (9 points total): The alphabetical listing below includes all of the adjusted account balances of T.O.'s Dance Studio as of December 31, 2015. All account balances are normal. Accounts Payable $ 3.000 Accounts Receivable 8,000 Accumulated Depreciation Equipment 3,000 Common Stock 2,000 Cash 5.000 Depreciation Expense Dividends Equipment Income Tax Expense Income Taxes Payable Rent Expense Retained Earnings 3,000 Salaries and Wages Expense 4,000 Service Revenue 18,000 Uneamed Revenue 1,000 Required: A. Prepare the closing entries. A blank journal page is available for your answer. (6 points) B. Prepare the post-closing trial balance as of December 31, 2015. A blank page is available for your answer. (3 points)
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Answer 1

A. Closing entries:

Date	General Journal	Debit	Credit
December 31, 2015	Service revenue	18000
	Income summary		18000
	(To close revenue accounts)
December 31, 2015	Income summary	8000
	Depreciation expense		1000
	Income tax expense		1000
	Rent expense		2000
	Salaries and wages expense		4000
	(To close expense accounts)
December 31, 2015	Income summary ($18000 - $8000)	10000
	Retained earnings		10000
	(To close income summary account)
December 31, 2015	Retained earnings	1000
	Dividends		1000
	(To close dividends account)

B.

T. O.'s Dance Studio
Post-Closing Trial Balance
As of December 31, 2015
Account	Debit	Credit
Accounts payable		3000
Accounts receivable	8000
Accumulated depreciation-equipment		3000
Common stock		2000
Cash	5000
Equipment	9000
Income taxes payable		1000
Retained earnings*		12000
Unearned revenue		1000
Total $	22000	22000

*Retained earnings = $3000 + $10000 - $1000 = $12000