Question

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31 0. Credit Debit $18,000 11,000 2,000 Account Title 101 Cash 126 Supplies 128 Prepaid Insurance 167 Equipment Accumulated depreciation Equipment 307 Common stock 318 Retained earnings 319 Dividends 404 Service revenue Depreciation expense ** Equipment 622 Salarie expense 637 Insurance expense 640 Rent expense 652 Supplies expense Total 23,000 $ 6,500 9,982 34,600 6,000 39,700 2,000 23,145 1,667 2.660 1.310 $90,782 $90, 782 1. Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901 2. Prepare the December 31, post-closing trial balance for Cruz Company. Note: The Retained Earnings account balance was $34.500 on December 31 of the prior year.

Answer 1

1.

Credit Date Dec. 31 Debit 39,700 General Journal Service revenue Income summary (to close revenue accounts) 39,700 Dec. 31 30,782 Income summary Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Supplies expense (to close expenses accounts) 2,000 23,145 1,667 2,660 1,310 Dec. 31 8,918 Income summary (39,700-30,782) Retained earnings (to close income summary account) 8,918 Dec. 31 6,000 Retained earnings Dividends (to close dividends account) 6,000

2.

Credit CRUZ COMPANY Post-closing trial balance Dec. 31 Accounts Debit Cash 18,000 Supplies 11,000 Prepaid insurance 2,000 Equipment 23,000 Accumulated depreciation Equipment Common stock Retained earnings (34600+8918-6000) Totals 54,000 6,500 9,982 37,518 54,000