Question

Exercise 4-10 See the instructions below (starting on line 28) The adjusted trial balance for Salon Marketing Co. as of December 31 follows: Adjusted Trial Balance Closing Entries Dr. C Post-Closing Trial Balance Dr. Dr. 9,200 25,000 42,000 17,500 31,000 Acct. Account title 101 Cash 106 Accounts receivable 153 Equipment 154 Accumulated depreciation - Equipment 183 Land 201 Accounts payable 209 Salaries payable 233 Unearned fees 301 E. Salon, Capital 302 E. Salon, Withdrawals 401 Marketing fees earned 611 Depreciation expense - equipment 622 Salaries expense 640 Rent expense 677 Miscellaneous expenses 901 Income summary 15,000 4,200 3,600 68,500 15,400 80,000 12,000 32,500 13,000 8,700 Total 188,800 188,800 Required: 1. Prepare the income statement, statement of owner's equity, and classified balance sheet (use worksheet labe 2. Prepare the closing journal entries on the attached blank journal (use worksheet labeled 'Ex 4-10 Journal') 3. Enter the closing journal journal entries into the Debit and Credit columns provided above 4. Prepare the post-closing trial balance in the Post-Closing Trial Balance provided above

Answer 1

Salon Marketing Co. 80000 Statement of Income For the period ending December 31 Marketing Fees Earned Less: Depreciation Expense - Equip. 12000 Salaries Expense 32500 Rent Expense 13000 Miscellaneous Expense 8700 Net Income 66200 13800 Statement of Owner's Equity For the period ending December 31 E.Salon, Capital 68500 Net Income 13800 82300 E.Salon, Withdawals - 15400 66900

Balance sheet As at December 31 Assets Current Assets Cash Accounts Receivable Amounts in $ Amounts in $ Liabilities Amounts in $ Amounts in $ Current Liabilities 9200 Accounts Payable 15000 25000 34200 Salaries Payable 4200 Unearned Fees 3600 22800 Non Current Assets Land Equipment Accum. Depre - Equip. Total Assets 42000 -17500 31000 Owner's Equity 24500 E.Salon, Capital 89700 Total Liabilities & Equity 66900 89700 Closing Enteries Date Particulars Debit in $ Credit in $ Dec-31 Income Summary a/c Dr. 66200 To Depreciation Expense - Equip. 12000 To Salaries Expense 32500 To Rent Expense 13000 To Miscellaneous Expense 8700 (Expense accounts closed) 80000 Dec-31 Marketing Fees Earned a/c Dr. To Income Summary (Revenue accounts closed) 80000 13800 Dec-31 Income Summary a/c Dr. To E.Salon, Capital (Revenue accounts closed) 13800 15400 Dec-31 E.Salon, Capital a/c Dr. To E.Salon, Withdawals (Drawings charged to Capital) 15400

Worksheet For the period ending December 31 Adjusted Trial Bal. Closing Enteries Post Closing Acct # Particulars Debit in $ Credit in $ Debit in $ Credit in $ Debit in $ Credit in $ 101 Cash 9200 9200 106 Accounts Receivable 25000 25000 153 Equipment 42000 42000 154 Accum. Depre - Equip. 17500 17500 183 Land 31000 31000 201 Accounts Payable 15000 15000 209 Salaries Payable 4200 4200 233 Unearned Fees 3600 3600 301 E.Salon, Capital 68500 66900 302 E.Salon, Withdawals 15400 401 Marketing Fees Earned 80000 80000 611 Depreciation Expense - Equip. 12000 12000 622 Salaries Expense 32500 32500 640 Rent Expense 13000 13000 677 Miscellaneous Expense 8700 8700 901 Income Summary 13800 Totals 188800 188800 80000 80000 107200 107200