Question

Chapter 5 Homework Problem $1 OverPriced Jlans,Iine Closing Etres for February In this problem you wil be closing OPJ's Revenue and Expense accounts for the month of February 2017. Remove and use the forms on Pgs 209 to 211 to complete this problem. Requirement 1 Based on the General Ledger account balances given on Pg 211 prepare OPJ's February closing entries. Place the closing entries in the General Journal on Pg 209 Requirement 2 Post the closing entries to the General Ledger accounts. Requirement 3 Compute an Ending Balance for the Retained Earmings account and put that balance in the account. Compute the After Close Balances for the Revenue and Expense accounts and put those balances in the accounts. Requirement 4 Prepare a Post-Closing Trial Balance. Requirement 5 If you have your solution to Problem 4-1 available, compare: D The Ending Balance in OPJ's Retained Earnings account on Pg 211, to D The Retained Earnings amount in OPJ's Balance Sheet on Pg 206 of Problem 4-1.

Answer 1

1.

General Journal
Date	Account	Debit	Credit
Feb. 28, 2017	Sales revenue	260000
	Income Summary		260000
	(To close revenue account)
Feb. 28, 2017	Income Summary	104050
	Cost of goods sold		66000
	Rent expense		4000
	Wages expense		33000
	Interest expense		1050
	(To close expense accounts)
Feb. 28, 2017	Income Summary ($260000 - $104050)	155950
	Retained earnings		155950
	(To close Income Summary)

2.

Sales Revenue
	Debit	Credit
Beg. Balance		0
Feb. 04		62000
Feb. 15		88000
Feb. 18		110000
Ending Balance		260000
Income Summary	260000
After Close Bal.	0	0
Cost of Goods Sold
	Debit	Credit
Beg. Balance	0
Feb. 04	16000
Feb. 15	22000
Feb. 18	28000
Ending Balance	66000
Income Summary		66000
After Close Bal.	0	0
Rent Expense
	Debit	Credit
Beg. Balance	0
Feb. 01	4000
Ending Balance	4000
Income Summary		4000
After Close Bal.	0	0
Wages Expense
	Debit	Credit
Beg. Balance	0
Feb. 07	10000
Feb. 27	23000
Ending Balance	33000
Income Summary		33000
After Close Bal.	0	0
Interest Expense
	Debit	Credit
Beg. Balance	0
Feb. 28	600
Feb. 28	450
Ending Balance	1050
Income Summary		1050
After Close Bal.	0	0
Retained Earnings
	Debit	Credit
Beg. Balance		0
Feb. 28		155950
Ending Balance		155950

4.

Post-Closing Trial Balance
Account Name	Debit	Credit
Cash - Big Bank	76000
Cash - Little Bank	27000
Accounts receivable	158000
Inventory	36000
Equipment	60000
Note Payable - Big Bank		65000
Note Payable - Little Bank		60000
Interest Payable - Big Bank		600
Interest Payable - Little Bank		450
Common stock		75000
Retained Earnings		155950
Sales Revenue		0
Cost of Goods Sold	0
Rent Expense	0
Wages Expense	0
Interest Expense	0
Total $	357000	357000