Question

Instructions: Below is the adjusted trial balance for Bear Advertising Inc. (1) Prepare an Income Statement. Sement of Retained Earnings anda Balance Sheet (2) Then pecare closing trics, pou them to accounts, and prepare a posl-closing trial balance The heverining in Income Statement 1000 Advance De 000 40 4000 15000 0 21500 Cowok Paired Earns Advertising Decatione We spend www.pw Supo LE 300 Statement of Retained Eamings 845196 545165 General Joumai PR Debt Balance Sheet Date Account Credit

Answer 1

1.

Income Statement Bear Advertising Inc. Statement of Income For the Year Ended August 31, 20XX Revenue Advetising Revenue $ 21,500 Total Revenue $ 21,500 Expenses Depreciation Expense $ 150 Insurance Expense $ 500 Interest Expense $ 40 Supplies Expense $ 2,000 Utilities Expense $ 800 Total Expenses $ 3,490 Balance Sheet Bear Advertising Inc. Balance Sheet as at August 31, 20XX Assets Current Assets Cash $ 24,675 Accounts receivable $ 4,500 Prepaid Insurance $ 2,500 Advertising Supplies $ 1,000 Total Current Assets $ Non-Current Assets Equipment $ 6,000 Less: Accumulated Depre. $ -150 Total Non-Current Assets $ 32,675 5,850 Net Income 18,010 $ 38,525 Statement of Retained Earnings Bear Advertising Inc. Statement of Retained Earnings For the Year Ended August 31, 20XX Beginning Balance $ Add: Net Income $ Sub total $ Less: Dividends $ Ending balance $ Total Assets Liabilities and Stockholder's Equity Current Liabilities Accounts Payable $ 475 Unearned Revenue $ 4,000 Interest Payable $ 40 Total Current Liabilities Notes Payable Total Liabilities S $ $ 4,515 4,000 8,515 18,010 18,010 -3,000 15,010 Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity $ $ $ 15,000 15,010 30,010 Total Liabilities and Stockholder's Equity $ 38,525 **Assumed that Notes payable is long term in nature

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2.

Credit Closing Entries Date Particulars August 31, 20xx Advetising Revenue Income Summary (to close revenue account) Debit $ 21,500 $ 21,500 $ 3,490 150 August 31, 20xx Income Summary Depreciation Expense Insurance Expense Interest Expense Supplies Expense Utilities Expense (To close Expense accounts) $ $ $ $ $ 500 40 2,000 800 $ 18,010 August 31, 20xx Income Summary Retained Earnings (To close income summary account)) $ 18,010 $ 3,000 August 31, 20Xx Retained Earnings Dividends (To close dividends account) $ 3,000

Cr Post Closing Trial Balance Dr Cash $ 24,675 Accounts receivable $ 4,500 Prepaid Insurance $ 2,500 Advertising Supplies $ 1,000 Equipment $ 6,000 Accumulated Depre. Accounts Payable Unearned Revenue Interest Payable Notes Payable Common Stock Retained Earnings $ $ $ $ $ $ $ 150 475 4,000 40 4,000 15,000 15,010 $ 38,675 $ 38,675

$ $ Retained Earnings 3,000 $ $ 18,010 $ 15,010 Dividends 3,000 $ 3,000 $ $ Advetising Revenue $ 21,500 21,500 $ Depreciation Expense 150 $ 150 $ $ $ $ $ Insurance Expense 500 $ 500 $ Interest Expense 40 $ $ 40 $ $ Supplies Expense 2,000 $ 2,000 $ Utilities Expense 800 $ $ 800

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