Question

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31. Credit Debit $ 18,000 14,400 2,089 23,000 14,40 $ 168 Accum 6.500 No. Account Title 101 Cash 126 Supplies 128 Prepaid insurance 167 Equipment Accumulated depreciation- © Equipment 301 A. Cruz, Capital 302 A. Cruz, Withdrawals 404 Services revenue 612 Depreciation expense-Equipment 622 Salaries expense 637 Insurance expense 640 Rent expense 652 Supplies expense Totals 45,150 6,000 50,000 2,000 29,150 2,100 3,350 1,650 $101,650 $101,650 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 A. Cruz, Capital was $45,150 on December 31 of the prioryear.

Answer 1

In adjusted trial balance, all the journal entries except transfer to income summary is made.

That means that depreciation entry has already been posted to accumulated depreciation and accumulated depreciation is including of impact of depreciation.

Requirement 1.

Date	Particulars	Debit ($)	Credit($)
31-Dec	Services revenue	$            50,000
	Income summary		$             50,000
31-Dec	Income summary	$            38,250
	Depreciation expense- equipment		$              2,000
	Salaries expense		$             29,150
	Insurance expense		$         2,100
	Rent expense		$        3,350
	Supplies expense		$      1,650
31-Dec	Income summary (50,000 - 38250)	$            11,750
	Cruz Capital		$             11,750
31-Dec	Cruz capital	$          6,000
	Cruz withdrawals		$       6,000

Requirement 2

                                                                Post closing trial balance

                                                                For the year ended December 31

Particulars	Debit ($)	Credit ($)
Cash	$         18,000
Supplies	$       14,400
prepaid insurance	$              2,000
equipment (23000-2000)	$            23,000
Accumulated depreciation-equipment		$               6,500
Cruz, capital(45,150+11,750-6000)		$             50,900
	$            57,400	$             57,400