Question

Question 2 The adjusted account balances of Yogi Company at December 31, 2021 are as follows:
 
Accounts receivable ...........................  $16,000 Bank overdraft ..............$ 14,000 Notes receivable .................................  13,000 Accounts payable ................6,000 Prepaid insurance ..............................  6,000 Notes payable .......................10,000 Machinery ..............................         50,000 Accumulated depreciation— Depreciation expense ........................  7,000  machinery..............................16,000 G. Yogi , drawings ...............................  4,500 Service revenue ...................29,000 Promotion expense ............................  600 Interest revenue ........................2,000 Rent expense ......................................  3,000 G. Yogi , capital ....................18,000 Salary expense ...................................  10,200 Unearned revenue  16,000 Insurance expense .............................    700    

                                                            $111,000                                          $111,000

 
Instructions a) Prepare closing entries for December 31, 2021. b) Determine the balance in G. Yogi's capital account after the entries have been posted. c) Prepare a post-closing trial balance at December 31, 2021.
 
 

Answer 1

Closing entries
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Service revenue			29,000
	Interest revenue			2,000
	Income summary				31,000
	(for revenue closed)
b.	Income summary			21500
	Depreciation expense			7000
	Promotion expense			600
	Rent expense				3000
	Salary expense				10200
	Insurance expense			700
	(for expenses closed)
c.	Income summary			9500
	G. Yogi Capital				9500
	(for net income closed)
d.	G. Yogi capital			4500
	G. Yogi Drawings				4500
	(for closing drawings)
Ending balance of Capital
Beginning balance			18,000
Add: Net Income			9,500
Subtotal				27,500
Less: Drawings			4,500
Ending balance of Capital		23,000
Post Closing Trial balance
				Debit $	Credit $
Accounts receivable			16000
Notes receivable			13000
Prepaid insurance			6000
Machinery			50000
Accumulated dep-Machinery			16000
Bank overdraft				14000
Accounts payable				6000
Notes payable				10000
Unearned revenue				16000
G. Yogi Capital				23000
Total				85000	85000