Question

Required information Exercise 3-22A Recording events in the general journal, posting to T-accounts, and preparing closing entries LO 3-1, 3-2, 3-3, 3-4 [The following information applies to the questions displayed below.) At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts: Account Balance Cash $ 27,300 Accounts receivable 19,600 Accounts payable 12,800 Common stock 23,700 Retained earnings 10,400 The following events apply to Oak Consulting for Year 2: 1. Provided $67,700 of services on account. 2. Incurred $3,200 of operating expenses on account. 3. Collected $48,400 of accounts receivable. 4. Paid $38,200 cash for salaries expense. 5. Paid $14,400 cash as a partial payment on accounts payable. 6. Paid a $9,600 cash dividend to the stockholders.

Answer 1

Solution

b&d Cash 27300 48400 Accounts Receivable Beg Bal. 19600 Service Revenue 67700 Cash 48400 Beg Bal. Accounts Receivable Salaries Expense Accounts Payable Dividends End Bal. 38200 14400 9600 13500 End Bal. 38900 Accounts Payable Common Stock 23700 Beg Bal. Beg Bal. Operating Expense Cash 12800 3200 14400 End Bal. 1600 End Bal. 23700 Retained Earnings Dividends Beg Bal. 10400 Beg Bal. Cash 9600 End Bal. 10400 End Bal. 9600 Service Revenue Operating Expense Beg Bal. Beg Bal. Accounts Receivable 67700 Accounts Payable 3200 End Bal. 67700 End Bal. 3200 Salaries Expense Beg Bal. Cash 38200 End Bal. 38200

Statement of Cash Flow OAK CONSULTING Effect on Transactions on the Financial Statements for Year 2 Balance Sheet Income Statement Assets = Liabilities + Stockholder's Equity Revenue Expense Net Income Accounts Accounts Common Retained No. Cash + Receivable Payable + Stock + earnings Bal. 27300+ 19600 - 12800 + 23700 + 10400 1 67700/= 677001- 2 3200 + 32001= 3 484001+ -48400/= 4 -38200+ 38200 = 5 -14400+ -14400+ 6 -9600+ -9600 + + + + + NC NC 48400 OA -38200 OA -14400 OA -9600 FA - Bal. 13500 + 38900 = 1600 + 23700 + 800 67700 41400/= 0 -13800

Journal Entry Worksheet Particular A Sales Revenue A/c...... Dr. To Income Summary (To record closure of service revenue ) Debit Credit $ 67,700.00 $ 67,700.00 $ 41,400.00 $ B Income Summary Dr. To Salary Expense A/c To Operating Expense A/C (To record closure of expenses) 38,200.00 3,200.00 $ $ 26,300.00 c Income Summary Dr. (529400 - $475300) To Retained earning (To close Income summary to Retained earning) $ 26,300.00 $ 9,600.00 D Retained Earning To Dividend A/C (To close dividend account) $ 9,600.00

f. Credit OAK CONSULTING Post-Closing Trial Balance As of December 31, Year 2 Account Titles Debit Cash $ 13,500 Accounts receivable $ 38,900 Accounts payable Common Stock Retained earnings $ $ 1,600 23,700 27,100 Total $ 52,400 S 52,400

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