Question

Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

Finders Investigative Services
End-of-Period Spreadsheet
For the Year Ended June 30, 2019
	~	Adjusted Trial Balance
Account Title	~	Dr.	Cr.
	~
Cash	~	28,000
Accounts Receivable	~	69,600
Supplies	~	4,600
Prepaid Insurance	~	2,500
Building	~	439,500
Accumulated Depreciation-Building	~		44,200
Accounts Payable	~		11,700
Salaries Payable	~		3,000
Unearned Rent	~		2,000
Stacy Tanner, Capital	~		373,800
Stacy Tanner, Drawing	~	12,000
Service Fees	~		718,000
Rent Revenue	~		12,000
Salaries Expense	~	522,100
Rent Expense	~	48,000
Supplies Expense	~	10,800
Depreciation Expense-Building	~	8,750
Utilities Expense	~	7,150
Repairs Expense	~	3,000
Insurance Expense	~	2,500
Miscellaneous Expense	~	6,200
	~	1,164,700	1,164,700

	Required:
1.	Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet. *
2.	Journalize the entries that were required to close the accounts at June 30. *
3.	If Stacy Tanner, Capital has instead decreased $30,000 after the closing entries were posted, and the withdrawals remained the same, what would have been the amount of net income or net loss? * Be sure to read the instructions for each financial statement carefully. Refer to the chart of accounts and the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Supplies 14 Prepaid Insurance 16 Building 17 Accumulated Depreciation-Building LIABILITIES 21 Accounts Payable 22 Salaries Payable 23 Unearned Rent EQUITY 31 Stacy Tanner, Capital 32 Stacy Tanner, Drawing 33 Income Summary REVENUE 41 Service Fees 42 Rent Revenue EXPENSES 51 Salaries Expense 52 Rent Expense 53 Supplies Expense 54 Depreciation Expense-Building 55 Utilities Expense 56 Repairs Expense 57 Insurance Expense 59 Miscellaneous Expense Labels Current assets Current liabilities Expenses For the Year Ended June 30, 2019 June 30, 2019 Property, plant, and equipment Revenues Amount Descriptions Decrease in owner’s equity Increase in owner’s equity Net income Net loss Stacy Tanner, capital, July 1, 2018 Stacy Tanner, capital, June 30, 2019 Total assets Total current assets Total expenses Total liabilities Total liabilities and owner’s equity Total property, plant, and equipment Total revenues Withdrawals 1. Prepare an income statement for the year ended June 30, 2019. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Score: 126/126 Finders Investigative Services Income Statement ? 1 ? 2 ? ? 3 ? ? 4 ? ? 5 ? 6 ? ? 7 ? ? 8 ? ? 9 ? ? 10 ? ? 11 ? ? 12 ? ? 13 ? ? 14 ? ? 15 ? ? 1. Prepare a statement of owner’s equity for the year ended June 30, 2019. No additional investments were made during the year. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items. Score: 54/54 Finders Investigative Services Statement of Owner’s Equity ? 1 ? ? 2 ? ? 3 ? ? 4 ? ? 5 ? ? 1. Prepare a balance sheet as of June 30, 2019. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Score: 139/139 Finders Investigative Services Balance Sheet ? 1 Assets 2 ? 3 ? ? 4 ? ? 5 ? ? 6 ? ? 7 ? ? 8 ? 9 ? ? 10 ? ? 11 ? ? 12 ? ? 13 Liabilities 14 ? 15 ? ? 16 ? ? 17 ? ? 18 ? ? 19 Owner’s equity 20 ? ? 21 ? ? 2. Based upon the end-of-period spreadsheet, journalize the closing entries. If you are unsure of account titles, see the chart of accounts. All transactions on this page must be entered (except for post ref(s)) before you will receive Check My Work feedback. PAGE 11 JOURNAL ACCOUNTING EQUATION Score: 121/159 DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 Closing Entries 2 3 4 5 6 7 8 9 10 11 12 13 14 3. If Stacy Tanner, Capital has instead decreased $30,000 after the closing entries were posted, and the withdrawals remained the same, what would have been the amount of net income or net loss? If required, use the minus sign to indicate a net loss.

Answer 1

Requirement - 1: Finders Investigative Services Income Statement For the year ended June 30, 2019 Revenues: Services fees $718,000 Rent Revenue $12,000 Total Revenue $730,000 Expenses: Salaries Expenses $522,100 Rent Expense $48,000 Supplies Expense $10,800 Depreciation Expense = - Building $8,750 Utilities Expense $7,150 Repairs Expense $3,000 Insurance Expense $ 2,500 Miscellaneous Expense $6,200 Total Expenses $608,500 Net Income $ 121,500 [$730,000 - $608,500] Finders Investigative Services statement of Owners' Capital For the year ended June 30, 2019 Stacy Tanner, capital , July 1, 2018 $373,800 Add: Net Income $121,500 [Ref: Income Statement]/$495,300 Less: Withdrawals Stacy Tanner, capital , June 30,2019 ($12,000)/$483,300 Finders Investigative Services Balance Sheet June 30, 2019 Assets Current Assets: Cash $28,000 Account Receivable $69,600 Supplies $4,600 Prepaid Insurance $2,500 Total Currents Assets /$104,700 Property, Plant and Equipment: Building $439,500 Accumulated amortization, building $44,200 Total property, Plant and Equipment $395,300 Total Assets $ 500,00 Liabilities and Owner's capital Current Liabilities: Accounts Payable $ 11,700 Salaries payable $ 3,000 Unearned Rent $2,00 Total Liabilities $2,000 Total Liabilities $16,700