Question

Exercise 3-10 Preparing closing entries and a post-closing trial balance LO P7, P8 The following adjusted trial balance contains the accounts and year end balances of Cruz Company as of December 31 Credit Debit $19,000 13,000 3,000 24,000 NO. Account Title 101 Cash 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation Equipment 307 Common stock 318 Retained earnings 319 Dividends 404 Services revenue 612 Depreciation expense-Equipment 622 Salaries expense 637 Insurance expense 640 Rent expense 652 Supplies expense Totals $7,500 10,000 37,600 7,000 44,630 3,000 22,000 2,500 3,400 2,200 $99, 100 $99,188 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 $37,600 on December 31 of the prior year. Complete this questions by entering your answers in the tabs below. Required 1 Required 2

Answer 1

1.) Credit Account No 404 901 Debit 44,000 Date Account Titles with explanation Dec. 31 Service Revenue Income Summary (To close Sales Revenue account recorded) $ S 44.000 901 $ 33,100 612 Dec. 31 Income Summary Depreciation Expenses - Equipment Salaries Expense Insurance Expenses Rent expenses Supplies Expenses (To close expenses accounts recorded) 622 637 640 $ 3.000 $ 22.000 $ 2.500 S 3,400 $ 2,200 652 $ 10.900 Dec. 31 Income Summary Retained Earnings (To close Net Income to retained earnings) 901 318 $ 10.900 318 $ 7,000 Dec. 31 Retained Earnings Dividends (To close dividends account) 319 S 7,000

Credit 126 Cruz Company Post Closing Trail Balance For the Year Ended December 31 Account Titile Account No Debit Cash 101 $19.000 Supplies $13,000 Prepaid Insurance 128 $ 3.000 Equipment 167 $24,000 Accumulated depreciation - Equipment 168 $ Common stock 307 S Retained earnings 318 $ Totals $59,000 $ 7,500 10,000 41,500 59,000