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Financial Statements and Closing Entries Last Chance Company offers legal consulting advice to prison inmates. Last...

Financial Statements and Closing Entries

Last Chance Company offers legal consulting advice to prison inmates. Last Chance Company prepared the end-of-period spreadsheet that follows at June 30, 2019, the end of the fiscal year:

Last Chance Company
End-of-Period Spreadsheet
For the Year Ended June 30, 2019
Unadjusted Adjusted
Trial Balance Adjustments Trial Balance
Account Title    Dr.    Cr.    Dr.    Cr.    Dr.    Cr.
Cash 5,100 5,100
Accounts Receivable 22,750 (a) 3,750 26,500
Prepaid Insurance 3,600 (b) 1,300 2,300
Supplies 2,025 (c) 1,500 525
Land 80,000 80,000
Building 340,000 340,000
Accum. Depr.—Building 190,000 (d) 3,000 193,000
Equipment 140,000 140,000
Accum. Depr.—Equipment 54,450 (e) 4,550 59,000
Accounts Payable 9,750 9,750
Salaries & Wages Payable (f) 1,900 1,900
Unearned Rent 4,500 (g) 3,000 1,500
Tami Garrigan, Capital 361,300 361,300
Tami Garrigan, Drawing 20,000 20,000
Fees Earned 280,000 (a) 3,750 283,750
Rent Revenue (g) 3,000 3,000
Salaries & Wages Expense 145,100 (f) 1,900 147,000
Advertising Expense 86,800 86,800
Utilities Expense 30,000 30,000
Travel Expense 18,750 18,750
Depr. Exp.—Equipment (e) 4,550 4,550
Depr. Exp.—Building (d) 3,000 3,000
Supplies Expense (c) 1,500 1,500
Insurance Expense (b) 1,300 1,300
Misc. Expense 5,875 5,875
900,000 900,000 19,000 19,000 913,200 913,200

Required:

1. Prepare an income statement for the year ended June 30.

Last Chance Company
Income Statement
For the Year Ended June 30, 2019
Revenues:
$
Total revenues $
Expenses:
$
Total expenses
$

2. Prepare a statement of owner's equity for the year ended June 30. No additional investments were made during the year.

Last Chance Company
Statement of Owner's Equity
For the Year Ended June 30, 2019
$
$
$

3. Prepare a balance sheet as of June 30.

Last Chance Company
Balance Sheet
June 30, 2019
Assets
Current assets:
$
Total current assets $
Property, plant, and equipment:
$
$
$
Total property, plant, and equipment
Total assets $
Liabilities
Current liabilities:
$
Total liabilities $
Owner's Equity
Total liabilities and owner's equity $

4. On the basis of the end-of-period spreadsheet, journalize the closing entries. For a compound transaction, if a box does not require an entry, leave it blank.

June. 30
June. 30

5. Prepare a post-closing trial balance. If a box does not require an entry, leave it blank.

Last Chance Company
Post-Closing Trial Balance
June 30, 2019
Debit Balances Credit Balances
0 0
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Answer #1

1.

Income Statement
Revenue
Fees Earned $      283,750
Rent Revenue $          3,000
Total Revenue $     286,750
Expenses
Salaries & Wages Expense $      147,000
Advertising Expense $        86,800
Utilities Expense $        30,000
Travel Expense $        18,750
Depr. Exp.—Equipment $          4,550
Depr. Exp.—Building $          3,000
Supplies Expense $          1,500
Insurance Expense $          1,300
Misc. Expense $          5,875
Total Expenses $     298,775
Net Income / (Loss) $      (12,025)

2.

Statement of Owner's Equity
Beginning Balance, Capital $      361,300
Add : Net Income $      (12,025)
$      349,275
Less : Drawings $        20,000
Ending Balance, Capital $     329,275

3.

Balance Sheet
Assets
Current Assets
Cash $          5,100
Accounts Receivable $        26,500
Prepaid Insurance $          2,300
Supplies $             525
Total Current Assets $        34,425
Property Plant and Equipment
Land $        80,000
Building $      340,000
Accum. Depr.—Building $    (193,000)
Equipment $      140,000
Accum. Depr.—Equipment $      (59,000)
Total Property Plant and Equipment $     308,000
Total Assets $     342,425
Liabilities & Owner's Equity
Current Liabilities
Accounts Payable $          9,750
Salaries & Wages Payable $          1,900
Unearned Rent $          1,500
Total Current Liabilities $        13,150
Owner's Equity
Tami Garrigan, Capital $      329,275
Total Owner's Equity $     329,275
Total Liabilities & Owner's Equity $     342,425

4.

Account Titles Debit Credit
Fees Earned $      283,750
Rent Revenue $          3,000
Tami Garrigan, Capital $      286,750
Tami Garrigan, Capital $      298,775
Salaries & Wages Expense $      147,000
Advertising Expense $        86,800
Utilities Expense $        30,000
Travel Expense $        18,750
Depr. Exp.—Equipment $          4,550
Depr. Exp.—Building $          3,000
Supplies Expense $          1,500
Insurance Expense $          1,300
Misc. Expense $          5,875
Tami Garrigan, Capital $        20,000
Tami Garrigan, Drawing $        20,000

5.

Post Closing Trial
Account Title    Dr.    Cr.
Cash $          5,100
Accounts Receivable $        26,500
Prepaid Insurance $          2,300
Supplies $             525
Land $        80,000
Building $      340,000
Accum. Depr.—Building $      193,000
Equipment $      140,000
Accum. Depr.—Equipment $        59,000
Accounts Payable $          9,750
Salaries & Wages Payable $          1,900
Unearned Rent $          1,500
Tami Garrigan, Capital $      329,275
Total $     594,425 $     594,425

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