Question

ROSE COMPANY INC Worksheet For the Year Ended December 31, 2017 Adjusted Trial Balance Account No. Account Titles 101 Cash 12 Accounts Receivable 126 Supplies 130 Prepaid Insurance 151 Office Equipment 152 Accum DepreciationOffice Equipment 200 Notes Payable 201 Accounts Payable 212 Salaries Payable 230 Interest Payable 311 Common Stock 320 Retained Earnings 332 Dividends 400 Service Revenue 610 Advertising Expense 631 Supplies Expense 711 Depreciation Expense 722 Insurance Expense 726 Salaries Expense 905 Interest Expense 8,100 10,800 1,500 2,000 24,000 5,600 15,000 6,100 2,400 600 10,000 5,800 7,000 61,000 8,400 4,000 5,600 3,500 31,000 600 Totals 106,500 106,500 Instructions (a) Complete the worksheet by extending the balances to the financial statement columns. (b) Prepare an income statement, a retained earnings statement, and a classified balance sheet. (Note: $9,000 of the notes payable become due in 2018.) (c) Prepare the closing entries. Use J14 for the journal page (d) Post the closing entries. Use the three-column form of account. Income Summary is No. 350 (e) Prepare a post-closing trial balance.

Answer 1

ROSE COMPANY INC. Worksheet For the Year Ended December 31, 2017 Adjusted TB Income Statement Balance Sheet Account Title Debit Credit Debit Credit Debit Credit Cash Accounts receivable Supplies Prepaid insurance Office Equipment Accumulated Dep. - Off. Equipment Note payable Accounts payable Salaries payable Interest payable Common Stock Retained Earnings Dividends Service Revenue Advertising expense Supplies expense 8,100 10,800 1,500 2,000 24,000 8,100 10,800 1,500 2,000 24,000 5,600 15,000 6,100 2,400 600 10,000 5,800 5,600 15,000 6,100 2,400 600 10,000 5,800 7,000 7,000 61,000 61,000 8,400 8,400 4,000 4,000

Depreciation expense Insurance expense Salaries expense Interest expense TOTALS 5,600 3,500 31,000 600 106,500 5,600 3,500 31,000 600 53,100 7,900 61,000 106,500 Net Income (Balancing figure) GRAND TOTALS 61,000 53,400 45,500 7,900 53,400 61,000 53,400 Closing Entries: Event General Journal Debit Credit 1)Service Revenue 61,000 Income Summary To close revenue account to income summa 61,000 2) Income Summary 53,100 [Sum of all expenses] Advertising expense Supplies expense Depreciation expense Insurance expense Salaries expense Interest expense 8,400 4,000 5,600 3,500 31,000 600 (To close expenses to income summary)

3) Income Summary 7,900 [61,000 -53,100] Retained Earnings To close income summary to Retained Earnings 7,900 (Difference between Event-1 and Event-2) 4)Retained Earnings 7,000 Dividends To close Dividends to Retained Earnings 7,000 ROSE COMPANY INC. Income Statement For the Year Ended December 31, 2017 Revenues: Service Revenue $61,000 Expenses Advertising expense Supplies expense Depreciation expense Insurance expense Salaries expense Interest expense Total Expenses $8,400 $4,000 $5,600 $3,500 $31,000 $600 $53,100 Net Income $7,900 [Revenue Total Expenses]

ROSE COMPANY INC. Statement of Retained Earnings For the Year Ended December 31, 2017 Retained Earnings, Beginning Balance $5,800 $7,900 $7,000 [Ref: Income Statement] Add: Net Income Less: Withdrawals Net Increase in Retained Earnings $900 $6,700 Retained Earnings, Ending Balance ROSE COMPANY INC. Balance Sheet December 31, 2017 Assets Liabilities & Shareholders' Equity Current Assets: Current Liabilities: Cash Accounts receivable Prepaid insurance Supplies Total Current Assets $8,100 $10,800 $1,500 $2,000 Note payable Accounts payable Salaries payable Interest payable $15,000 $6,100 $2,400 $600 $22,400 Total liabilities $24,100 Plant, Property & Equipment: Shareholders' Equity:

Office Equipment Accumulated Dep. - Off. Equipmer Total Prop., Plant & Equip $24,000 $5,600 $10,000 $6,700 Common Stock [Ref: Statement of Retained Earnings] Retained Earnings $18,400 Total Shareholders' Equity $40,800 Total Liabilities & SHs' equity $16,700 $40,800 Total Assets ROSE COMPANY INC. Post-Closing Trial Balance December 31, 2017 Account Titles Cash Accounts receivable Prepaid insurance Supplies Office Equipment Accumulated Dep. - Off. Equipment Note payable Accounts payable Sa Debit 8,100 10,800 2,000 1,500 24,000 Credit laries payable Interest payable Common Stock Retained Earnings Totals 5,600 15,000 6,100 2,400 600 10,000 6,700 46,400 46,400