Question

1. The End of the Accounting Cycle - the closing process (The return of Whiplash, Ltd.!): The financial statements for Whiplash, Ltd. for 2019 are given below. Given these financial statements, complete the following: PART A - Record closing entries: Record all four closing journal entries using the information in the financial statements given below. For revenue and expense accounts, don't forget to close to the 'Income Summary' account first before closing the net income/loss) amount to Retained Earnings. PART B - Prepare a post-closing trial balance: After completing PART A, prepare a post-closing trial balance for Whiplash, Ltd. as of December 31st, 2019 with the list of accounts in the following order: assets, liabilities, common stock, and retained earnings. Whiplash, Ltd. Income Statement For the year ended 12/31/2019 Revenues: Service Revenue Interest Revenue Total Revenues $ $ $ 25,920 900 26,820 Expenses: Rent Expense Utilities Expense Wages Expense Depreciation Expense Total Expenses $ $ $ $ 4,000 760 16,000 2,200 22,960 $ Net Income $ 3,860

Answer 1

a Service revenue $ 25,920 Interest Revenue $ 900 Income Summary $ 26,820 (Revenue accounts closed with income summary) b Income Summary $ 22,960 Rent expense $ 4,000 Utilities expense $ 760 Wages expense $ 16,000 Depreciation expense $ 2,200 (Expense accounts closed with income summary) c Income Summary $ 3,860 Retained Earnings $ 3,860 (Income Summary closed with Retained earnings) d Retained Earnings $ 450 Dividends (Dividends closed with Retained earnings) $ 450

Post Closing Trial Balance $ $ 15,920 12,745 $ 8,440 $ 12,000 Cash Accounts Recievable Accounts Payable Equipment Accumulated Depreciation Wages payable Common Stock Prepaid rent Retained earnings Utilities payable Deferred revenue Interest payable Notes payable $ $ $ 3,500 5,420 5,000 $ 20,000 $ $ $ $ $ 12,565 190 1,350 200 24,000 $ 60,665 $ 60,665

A post closing trial balance is prepared after income statement. It contains all balance sheet items.