Question

July 31 Fees Earned 21,200 Wages Expense Office Rent Expense 2,940 2,550 1,375 Equipment Rent Expense Utilities Expense 1,215 Music Expense 3,610 Advertising Expense 1,500 Supplies Expense 925 Insurance Expense 225 Depreciation Expense 50 Miscellaneous Expense 1,855 Peyton Smith, Capital 4,955 DATE ACCOUNT POST. REF. DEBIT CREDIT July 31 Peyton Smith, Capital 1,750 Peyton Smith, Drawing 1,750

Answer 1

PS Music Post closing trial balance July 31, 2019
	Debit balances	Credit balances
Cash	$9,945
Accounts receivables	$4,150
Supplies	$275
Prepaid insurance	$2,475
Office equipment	$7,500
Accumulated depreciation - office equipment		$50
Accounts payable		$8,350
Wages payable		$140
Unearned revenue		$3,600
Payton smith capital		$12205
	$24,345	$24,345

Solution:

Journal; entries to close incomes and expenses accounts-

Date	Accounts	Debit	Credit
July 31, 2019	Fees earned	$21200
	Income summary		$21200
	(To transfer income to income summary)
July 31, 2019	Income summary	$162450
	Music Expense		$3,610
	Wages Expenses		$2,940
	Office rent Expenses		$2,550
	Advertising Expenses		$1,500
	Equipment rent Expenses		$1,375
	Utilities Expenses		$1,215
	Supplies Expenses		$925
	Insurance  Expenses		$225
	Depreciation Expenses		$50
	Miscelleneous Expenses		$1,855
	(To transfer expenses to income summary)

Income statement-

PS Music Post closing trial balance July 31, 2019
	Amount	Amount
Fees earned (Sales revenue)		$21200
(-) Expenses:
Music Expense	$3,610
Wages Expenses	$2,940
Office rent Expenses	$2,550
Advertising Expenses	$1,500
Equipment rent Expenses	$1,375
Utilities Expenses	$1,215
Supplies Expenses	$925
Insurance  Expenses	$225
Depreciation Expenses	$50
Miscelleneous Expenses	$1,855
Total Expenses		$16245
Net profit		$4955

Journal entry to transfer profit to capital account-

Date	Accounts	Debit	Credit
July 31, 2019	Income summary	$4955
	Payton smith capital		$4955
	(To transfer profit to capital account)

Payton smith capital account -

	Amount
Opening balance	$9000
(+) net profit	$4955
(-) drawings	($1750)
Closing balance	$12205