The following transactions pertain to Smith Training Company for Year 1:
Jan. | 30 | Established the business when it acquired $48,000 cash from the issue of common stock. | |
Feb. | 1 | Paid rent for office space for two years, $17,400 cash. | |
Apr. | 10 | Purchased $880 of supplies on account. | |
July | 1 | Received $28,000 cash in advance for services to be provided over the next year. | |
20 | Paid $660 of the accounts payable from April 10. | ||
Aug. | 15 | Billed a customer $9,300 for services provided during August. | |
Sept. | 15 | Completed a job and received $2,600 cash for services rendered. | |
Oct. | 1 | Paid employee salaries of $31,000 cash. | |
15 | Received $8,700 cash from accounts receivable. | ||
Nov. | 16 | Billed customers $31,500 for services rendered on account. | |
Dec. | 1 | Paid a dividend of $1,100 cash to the stockholders. | |
31 | Adjusted records to recognize the services provided on the contract of July 1. | ||
31 | Recorded $2,500 of accrued salaries as of December 31. | ||
31 | Recorded the rent expense for the year. (See February 1.) | ||
31 | Physically counted supplies; $80 was on hand at the end of the period. |
f. Prepare a post-closing trial balance for Year 1. (Round your final answers to the nearest whole dollar amount.)
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Solution
Smith Training Company
Post-Closing Trial Balance
Post-closing trial balance is prepared after closing the income and expenses accounts to the income summary and the net income/ (loss) to the retained earnings. Also, the retained earnings account is adjusted for dividends paid.
Smith Training Company |
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Post-Closing Trial Balance |
||
Account Titles |
Debit |
Credit |
Cash |
37,140 |
|
Accounts Receivable |
32,100 |
|
supplies |
80 |
|
Prepaid Rent |
9,425 |
|
Accounts Payable |
220 |
|
Salaries payable |
2,500 |
|
unearned revenue |
14,000 |
|
Common Stock |
48,000 |
|
Retained Earnings |
14,025 |
|
Totals |
78,745 |
78,745 |
Computations:
Cash |
|||
Description |
Amount |
Description |
Amount |
common stock |
48,000 |
prepaid rent |
17,400 |
Unearned Revenue |
28,000 |
Accounts payable |
660 |
Service Revenue |
2,600 |
Salaries expense |
31,000 |
Accounts receivable |
8,700 |
Dividends |
1,100 |
Ending balance |
37,140 |
Accounts Receivable |
|||
Description |
Amount |
Description |
Amount |
Service Revenue |
9,300 |
cash |
8,700 |
Service Revenue |
31,500 |
||
Ending balance |
32,100 |
Prepaid Rent |
|||
Description |
Amount |
Description |
Amount |
Cash |
17,400 |
Rent Expense |
7,975 |
Ending balance |
9,425 |
Rent expense = 17,400 x 11/24 months = 7,975
Service Revenue |
||||||||||
Description |
Amount |
Description |
Amount |
|||||||
Accounts Receivable |
9,300 |
|||||||||
Cash |
2,600 |
|||||||||
Accounts Receivable |
31,500 |
|||||||||
Unearned Revenue |
14,000 |
|||||||||
Ending balance |
57,400 |
|||||||||
Accounts Payable |
||||||||||
Description |
Amount |
Description |
Amount |
|||||||
Cash |
660 |
Supplies |
880 |
|||||||
Ending balance |
220 |
|||||||||
Salaries Expense |
||||||||||
Description |
Amount |
Description |
Amount |
|||||||
Cash |
31,000 |
|||||||||
Salaries Payable |
2,500 |
|||||||||
Ending balance |
33,500 |
|||||||||
Income Statement |
||
Service Revenue |
57,400 |
|
expenses: |
||
salaries expense |
33,500 |
|
Supplies expense |
800 |
|
rent expense |
7,975 |
|
total expenses |
42,275 |
|
net income |
15,125 |
Retained Earnings –
Beg. Balance nil
Add: net income 15,125
Less: dividends 1,100
Retained earnings ending balance = 14,025
The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business...
The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
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The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
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The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $48,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $17,400 cash. Apr. 10 Purchased $880 of supplies on account. July 1 Received $28,000 cash in advance for services to be provided over the next year. 20 Paid $660 of the accounts payable from April 10. Aug. 15 Billed a customer $9,300 for...
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