Question

Problem 4-3 Prepare worksheet, adjusting entries, and closing entries (LO.2.4) The following trial balance and additional data are for Sure Sale Realty Company SURE SALE REALTY COMPANY Trial Balance December 31, 2018 Debits Credits Cash $ 62,800 Accounts Receivable 117.120 Prepaid Rent 46,080 Equipment 173,760 Accumulated Depreciation Equipment $ 21,120 Accounts Payable 62.400 Capital Stock 96,000 Retained Earnings, January 1, 2018 49.920 Dividends 46,080 Commissions Revenue 653,200 Salaries Expense 321,600 Travel Expense 96,480 Miscellaneous Expense 18,720 $ 882,640 $ 882,640 Additional data 1. The prepaid rent is for the period July 1, 2018, to March 31, 2019. 2. The equipment has an expected life of 10 years with no salvage value. 3. Accrued salaries are $14,760. 4. Travel expenses accrued but unreimbursed to sales staff'at December 31 were $19,380. a. Prepare a 12-column work sheet for the year ended December 31, 2018. You need not include account numbers or explanations of adjustments. b. Prepare adjusting journal entries. c. Prepare closing journal entries. Required

Answer 1

Answer-

a.		Before adjustement		Increase	Decrease	After adjustment		Income Statement		Retained Earning		Balance sheet
		Debits	Credits			Debits	Credits	Debits	Credits	Debits	Credits	Debits	Credits
	Cash	62,800				62,800	-					62,800
	Accounts Receivable	117,120				117,120	-					117,120
	Prepaid rent	46,080			23,040	23,040	-					23,040
	Equipment	173,760				173,760	-					173,760
	Accumulated depreciation-Equipment		21,120	17,376		-	38,496						38,496
	Accounts Payable		62,400	11,520		-	73,920						73,920
	Capital Stock		96,000			-	96,000						96,000
	Retained Earning, January 31, 2012		49,920	-		-	49,920				164,464		168,304
	Dividend	46,080				46,080	-			46,080
	Commission revenue		653,200			-	653,200		653,200
	Salaries expenses	321,600		11,520		333,120		333,120
	travel expenses	96,480				96,480	-	96,480
	Miscalneous expenses	18,720				18,720	-	18,720
	Rent expenses	-	-	23,040		23,040		23,040
	Depreciation expenses	-	-	17,376		17,376		17,376
	Total	882,640	882,640			911,536	911,536	488,736	653,200	46,080	164,464	376,720	376,720

b.	Adjusting Journal entries:
	Accounts	Debit ($)	Credit ($)
1)	Rent Expenses	23,040
	Prepaid Rent		23,040
	(To record prepaid rent)
	Working:
	Rent expenses	46080*6/12	23,040
2)	Depreciation expenses	17,376
	Accuulated depreciation		17,376
	(To record depreciation expense)
	Working:
	Depreciation expenses	(173760-0)/10	17,376
3)	Salaries expenses	11,520
	Accounts Payable		11,520

c.	Closing journal entries:
		Debit	Credit
	Commission revenue	653,200
	Income Summary		653,200
	(To record commission revenue)
	Income Summary	488,736
	Salaries expenses		333,120
	travel expenses		96,480
	Miscalneous expenses		18,720
	Rent Expenses		23,040
	Deperciation expenses		17,376
	(To record all expenses)
	Income Summary	164,464
	Retianed earning		164,464
	Retained earning	46,080
	Dividend		46,080