Question

Required information Problem 3-32A Comprehensive problem: single cycle LO 3-1, 3-2, 3-3, 3-4 [The following information applies to the questions displayed below.] The following transactions pertain to Smith Training Company for Year 1: Jan. 30 Established the business when it acquired $45,000 cash from the issue of common stock. Feb. 1 Paid rent for office space for two years, $24,000 cash. Apr. 10 Purchased $3,200 of supplies on account. July 1 Received $24,000 cash in advance for services to be provided over the next year. 20 Paid $1,500 of the accounts payable from April 10. Aug. 15 Billed a customer $18,000 for services provided during August. Sept. 15 Completed a job and received $8,400 cash for services rendered. Oct. 1 Paid employee salaries of $12,000 cash. 15 Received $15,000 cash from accounts receivable. Nov. 16 Billed customers $42,000 for services rendered on account. Dec. 1 Paid a dividend of $15,000 cash to the stockholders. 31 Adjusted records to recognize the services provided on the contract of July 1. 31 Recorded $3,600 of accrued salaries as of December 31. 31 Recorded the rent expense for the year. (See February 1.) 31 Physically counted supplies; $280 was on hand at the end of the period.

Answer 1

f.

Smith Training Company Post-Closing Trial Balance December 31, Year 1
Account Titles		Debit		Credit
Cash		$39,900
Accounts Receivable		45,000
Prepaid Rent		13,000
Supplies		280
Accounts Payable				$  1,700
Unearned Revenue				12,000
Salaries Payable				3,600
Common Stock				45,000
Retained Earnings				35,880
Totals		$98,180		$98,180

Working:

	Smith Training Company Closing Entries, Year 1
Date		Debit	Credit
Dec. 31	Service Revenue	80,400
	Retained Earnings		80,400
Dec. 31	Retained Earnings	29,520
	Salaries Expense		15,600
	Rent Expense		11,000
	Supplies Expense		2,920
Dec. 31	Retained Earnings	15,000
	Dividends		15,000