Question

Use the following Information below for Tom Jones Consultaney to answer ques 19. Credit Debit 10,500 150,000 5,000 25.000 300,000 Cash Accounts receivable Prepaid rent Supplies Equipment Accumulated depreciation equipment Accounts payable Notes payable due in three months Salaries payable Interest payable Tom Jones's Capital Tom Jones's Withdrawal Consulting revenue Salaries expense Rent expense Depreciation expense Interest expense Advertising expense Totals 125,000 30,000 30,000 4.000 1,000 200,000 25,000 295,000 120,000 15,000 30,000 2.000 2.500 S685.000 S685.000 Question 17: Prepare Tom Jones Income Statement for December 31, 2018. (10 Points) Question 18: Prepare the Statement of Owner's Capital. (10 Points) Question 19: Prepare the Closing Entries. (12 Points) Extra Credit: Prepare the Balance Sheet for Tom Jones Consultancy.

Answer 1

Ans. 17	TOM JONES
	Income Statement
	For the Year Ended December 31, 2018
	Particulars	Amount	Amount
	Revenues:
	Consulting revenue	$295,000
	Total revenue (a)		$295,000
	Less: Expesnes:
	Salaries expenses	$120,000
	Rent expenses	$15,000
	Depreciation expense	$30,000
	Interest expense	$2,000
	Advertising expense	$2,500
	Total expenses (b)		$169,500
	Net Income (a - b)		$125,500
Ans. 18	TOM JONES
	Statement of Owner's Capital
	For the Year Ended December 31, 2018
	Beginning balance of Tom Jone's Capital		$200,000
	Add: Net income		$125,500
	Less: Tom Jones withdrawal		-$25,000
	Ending balance of Tom Jone's Capital		$300,500
Ans. 19
Date	Account Titles and Explanations	Debit	Credit
31-Dec	Consulting revenue	$295,000
	Income summary		$295,000
	(To close revenue accounts)
31-Dec	Income summary	$169,500
	Salaries expenses		$120,000
	Rent expenses		$15,000
	Depreciation expense		$30,000
	Interest expense		$2,000
	Advertising expense		$2,500
	(To close expenses accounts)
31-Dec	Income summary	$125,500
	Tom Jone's Capital		$125,500
	(To close net income)
31-Dec	Tom Jone's Capital	$25,000
	Tom Jone's Withdrawals		$25,000
	(To close the dividends account)
Ans.	TOM JONES
	Balance Sheet
	For the Year Ended December 31, 2018
	Assets:
	Cash	$10,500
	Accounts receivables	$150,000
	Prepaid rent	$5,000
	Supplies	$25,000
	Total current assets		$190,500
	Long term assets:
	Equipment	$300,000
	Less: Accumulated depreciation	($125,000)	$175,000
	Total Assets		$365,500
	Liabilities and Stockholder's Equity:
	Accounts payable	$30,000
	Notes payable	$30,000
	Salaries payable	$4,000
	Interest payable	$1,000
	Total Liabilities		$65,000
	Stockholder's equity:
	Tom Jone's Capital	$300,500
	Total Stockholder's Equity		$300,500
	Total Liabilities and Stockholder's Equity		$365,500