Question

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31. Credit Debit $18,000 13,300 2,000 23,000 $ 6,500 45,480 Account Title 101 Cash 126 Supplies 128 Prepaid insurance 167 Equipment 168 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 6,000 44,800 2.000 26,118 1.882 3.002 1.478 $96,780 $96.780 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 $45,480 on December 31 of the prior year.

Answer 1

Requirement 1 Closing Entries Date Particulars Dec-31 Services Revenue Income Summary (To record the entry to close revenue accounts) in $) Debit 44,800 (in $) Credit 44,800 34,480 Dec-31 Income Summary Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Supplies expense (To record the entry to close expense accounts) 2,000 26,118 1,882 3,002 1,478 10,320 Dec-31 Income Summary (44800-34480) A. Cruz, Capital (To record the entry to close income summary account) 10,320 6,000 Dec-31 A. Cruz, Capital A. Cruz, Withdrawals (To record the entry to close withdrawals account) 6,000

Requirement 2 Statement of Owner's Equity in $ in s 45,480 45,480 Particulars A. Cruz, Capital Balance in the beginning (+) Additional Capital bought in Sub-Total (+) Net Profit for the year (-) Withdrawals made Net Increase in Capital A. Cruz, Capital Balance in the end 10,320 -6,000 4,320 49,800 (in $) Credit Balance Cruz Company Post-Closing Trial Balance as on December 31 (in $) Account Name Debit Balance Cash 18,000 Supplies 13,300 Prepaid Insurance 2,000 Equipment 23,000 Accumulated Depreciation Equipment A. Cruz, Capital Total 56,300 6,500 49,800 56,300