Question

P3-8A Financial Statements and Closing Entries The adjusted trial balance shown below is for Sharpe Consulting Service as of December 31. Bryan Sharpe made no capital contributions during the year. Please see attached picture for further details. Need guidance for answering questions in excel. Thank you.

Cambridge Business Publishers Chapter 3 Accrual Basis of Accounting 1 Cash............. Accounts receivable... Supplies ... Prepaid insurance. ...... Equipment ............ Accumulated depreciation Equipment Accounts payable...... Long-term notes payable .. Common stock .... Retained earnings .. Dividends .......... Service fees earned .. Rent expense....... Salaries expense ...... Supplies expense. ..... Insurance expense..... Depreciation expense-Equipment.. Interest expense........ Totals ........ Adjusted Trial Balance Debit Credit $ 2,900 3,270 5,060 1,500 6,400 $ 1,080 845 7,200 2,800 5,205 2,900 62,600 15,500 33,400 4,200 3,250 720 630 $79,730 $79,730 Required a. Prepare an income statement and a statement of stockholders' equity for the year, and a balance sheet as of December 31. b. Prepare closing entries directly to Retained Earnings in general journal form.

Answer 1

Sharpe Consulting Service
Income statement for the year ended 31 December XXXX
		$
Revenues
Services Fees		62600
Salaries Expense		33400
Gross Profit		29200
Other Expenses
Rent Expense	15500
Supplies Expense	4200
Insurance Expense	3250
Depreciation Expense - Equipment	720
		23670
Operating Profit		5530
Interest Expense		630
Net Profit (Transfer to Retained Earnings)		4900
Sharpe Consulting Service
Statement of Stockholders Equity as on 31 Dec XXXX
Common Stock		2800
Retained Earnings
Opening Balance	5205
Add: Profits during the year	4900
Less: Dividends	-2900	7205
Total Stockholders Equity		10005
Sharpe Consulting Service
Balance Sheet as on 31 December XXXX
Assets	$
Current Assets
Cash	2900
Supplies	5060
Accounts Receivable	3270
Prepaid Insurance	1500
Total Current Assets	12730
Non Current Assets
Equipment	6400
Less: Accumulated Depreciation	-1080
Total Non Current Assets	5320
Total Assets	18050
Liaiblities and Owners equity	$
Current Liabilities
Accounts Payable	845
Long Term Liabilities/Non Current Liabiities
Long Term Notes Payable	7200
Shareholders Equity	10005
Total Liabilities	18050

Answer b. Closing Entry for Retained Earnings:

Service Fees Dr   62600
Retained Earnings (Bal fig)   Cr 4900
Salaries Expense Cr 33400
Rent Expense Cr 15500
Supplies Expense Cr 4200
Insurance Expense Cr 3250
Depreciation Expense Cr 720
Interest Expense Cr 630