Question

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31. Credit Debit $18,000 14,400 2,000 23,000 $ 6,500 7,482 41,600 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 6,000 35,700 2,000 20,813 1,499 2,392 1,178 $91,282 $91,282 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 $41,600 on December 31 of the prior year. Complete this questions by entering your answers in the tabs below. Required 1 Required 2 Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901.

Answer 1

Answer to Question 1:

Credit Date Account No. Debit 31-Dec Service revenue 404 $ 35,700 Income Summary 901 (To record closing entry for revenue) $ 35,700 31-Dec Income Summary 901 $ 27,882 Depreciation expense - equipment 612 Salaries expense 622 Insurance expense 637 Rent expense 640 Supplies expense 652 (To record closing entry for expenses) $ $ $ $ $ 2,000 20,813 1,499 2,392 1,178 Income Summary 31-Dec ($35,700 - $27,882) 901 $ 7,818 Retained Earnings 318 (To close the income summary account) $ 7,818 31-Dec Retained Earnings 318 $ 6,000 Dividends 319 (To record closing entry for dividends) $ 6,000

Answer to Question 2:

Credit Danos Company Post Closing Trial Balance December 31, 20XX No. Accounts Titles Debit 101 Cash $ 18,000 126 Supplies $ 14,400 128 Prepaid Insurance $ 2,000 167 Equipment $ 23,000 | Accumulated Depreciation - 168 Equipment 307 Common Stock 318 Retained Earnings Totals $ 57,400 $ $ $ $ 6,500 7,482 43,418 57,400 - Closing Balance for Retained Earnings: Closing Balance for Retained Earnings = Opening Balance + Net Profit - Dividends Closing Balance for Retained Earnings = $41,600 + $7,818 - $6,000 Closing Balance for Retained Earnings = $43,418