Question

Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 20Y8, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

Foxy Investigative Services
End-of-Period Spreadsheet
For the Year Ended November 30, 20Y8
	~	Adjusted Trial Balance
Account Title	~	Dr.	Cr.
	~
Cash	~	22,000
Accounts Receivable	~	68,400
Supplies	~	4,400
Prepaid Insurance	~	2,500
Building	~	433,500
Accumulated Depreciation-Building	~		42,800
Accounts Payable	~		11,400
Salaries Payable	~		4,000
Unearned Rent	~		2,000
Common Stock	~		80,000
Retained Earnings	~		293,400
Dividends	~	11,700
Service Fees	~		707,300
Rent Revenue	~		11,700
Salaries Expense	~	525,900
Rent Expense	~	46,800
Supplies Expense	~	11,000
Depreciation Expense-Building	~	7,600
Utilities Expense	~	7,600
Repairs Expense	~	3,000
Insurance Expense	~	2,000
Miscellaneous Expense	~	6,200
	~	1,152,600	1,152,600

	Required:
1.	A. Prepare an income statement for the year ended November 30, 20Y8. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. B. Prepare a statement of stockholders’ equity for the year ended November 30, 20Y8. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. C. Prepare a balance sheet as of November 30, 20Y8. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2.	Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.
3.	If Retained Earnings had instead decreased $33,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.

CHART OF ACCOUNTS
Foxy Investigative Services
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 17 Building 18 Accumulated Depreciation-Building LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Rent EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends	REVENUE 41 Service Fees 42 Rent Revenue EXPENSES 51 Salaries Expense 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense-Building 55 Utilities Expense 56 Repairs Expense 57 Insurance Expense 59 Miscellaneous Expense

Labels
Current assets
Current liabilities
Expenses
For the Year Ended November 30, 20Y8
November 30, 20Y8
Property, plant, and equipment
Revenues
Amount Descriptions
Balances, December 1, 20Y7
Balances, November 30, 20Y8
Dividends
Net income
Net loss
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and stockholders’ equity
Total property, plant, and equipment
Total revenues
Total stockholders’ equity

1A. Prepare an income statement for the year ended November 30, 20Y8. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons :) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. Foxy Investigative Services Income Statement (Label) 1 Label) 5 Label)

3. If Retained Earnings had instead decreased $33,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.

$________

Answer 1

1
A.			Income statement
						$	$
	Revenues:
	Service fees					707300
	Rent revenue					11700	719000
	Expenses:
	Salaries expense					525900
	Rent expense					46800
	Supplies expense					11000
	Depreciation expense-Building					7600
	Utilities expense					7600
	Repairs expense					3000
	Insurance expense					2000
	Miscellaneous expense					6200	610100
	Net income						108900
B.			Statement of stockholder's equity
					Common stock	Retained earnings	Total stockholder's equity
	Beginning balance				80000	293400	373400
	Net income					108900	108900
	Dividends					-11700	-11700
	Ending balance				80000	390600	470600
C.			Balance sheet
						$	$
			Assets
	Current assets
	Cash					22000
	Accounts receivable					68400
	Supplies					4400
	Prepaid insurance					2500
	Total current assets						97300
	Property,plant and equipment
	Building					433500
	Accumulated depreciation-Building					-42800	390700
	Total assets						488000
		Liabilities and stockholder's equity
	Current liabilities
	Accounts payable					11400
	Salaries payable					4000
	Unearned rent					2000
	Total current liabilities				a		17400
	Stockholder's equity
	Common stock					80000
	Retained earnings					390600
	Total stockholder's equity				b		470600
	Total liabilities and stockholder's equity				a+b		488000