Question

Question 3

The completed financial statement columns of the worksheet for Blossom Company are shown below.

Blossom Company Worksheet For the Year Ended December 31, 2017
				Income Statement				Statement of Financial Position
Account No.		Account Titles		Dr.		Cr.		Dr.		Cr.
101		Cash						6,444
112		Accounts Receivable						7,450
130		Prepaid Insurance						2,023
157		Equipment						33,902
158		Accumulated Depreciation—Equip.								10,743
201		Accounts Payable								11,131
212		Salaries and Wages Payable								3,287
311		Share Capital—Ordinary								20,000
320		Retained Earnings								10,300
332		Dividends						2,166
400		Service Revenue				43,992
622		Maintenance and Repairs Expense		3,529
711		Depreciation Expense		2,880
722		Insurance Expense		1,351
726		Salaries and Wages Expense		35,260
732		Utilities Expense		4,448
		Totals		47,468		43,992		51,985		55,461
		Net Loss				3,476		3,476
				47,468		47,468		55,461		55,461

Prepare an income statement (amounts in U.S. dollars). (If the amount for net income is negative, enter amount with either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).)

Prepare retained earnings statement (amounts in U.S. dollars).

Prepare a classified statement of financial position (amounts in U.S. dollars). (List current assets in the reverse order of liquidity.)

Prepare the closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Post the closing entries and balance the accounts. (Use T-accounts.) Income Summary is account No. 350. (Post entries in the order of journal entries presented in the previous part.)

Prepare a post-closing trial balance.

Answer 1

Blossom Company Income Statement For the Year Ended December 31, 2017
Revenues
Service revenue		43992
Expenses
Maintenance and Repairs Expense	3529
Depreciation Expense	2880
Insurance Expense	1351
Salaries and Wages Expense	35260
Utilities Expense	4448
Total expenses		47468
Net		$(3476)

Blossom Company Statement of Retained earnings For the Year Ended December 31, 2017
Retained earnings, January 1, 2017	10300
Less: net loss	3476
	6824
Less: dividends	2166
Retained earnings, December 31, 2017	$4658

Blossom Company Balance Sheet December 31, 2017
Current assets
Cash		6444
Accounts receivable		7450
Prepaid insurance		2023
Total current assets		15917
Property, plant and equipment
Equipment	33902
Less: accumulated depreciation	10743	23159
Total assets		39076
Liabilities and Owner’s Equity
Current liabilities
Accounts payable		11131
Salaries payable		3287
Total current liabilities		14418
Owner’s equity
Capital		20000
Retained earnings		4658
Total owner’s equity		24658
Total liabilities and owner’s equity		39076

General journal
Date	Account titles	Ref.	Debit	Credit
Dec 31	Service revenue		43992
	Income summary			43992
Dec 31	Income summary		47468
	Maintenance and Repairs Expense			3529
	Depreciation Expense			2880
	Insurance Expense			1351
	Salaries and Wages Expense			35260
	Utilities Expense			4448
Dec 31	Income summary		3476
	Retained earnings			3476
Dec 31	Retained earnings		2166
	Dividends			2166

Part C

Capital
		12/31 Bal.	20000
		12/31 Bal.	20000

Retained earnings
12/31	3476	12/31 Bal.	10300
12/31	2166
		12/31 Bal.	4658

Income summary
12/31	47468	12/31	43992
12/31 Bal.	3476

Service revenue
		12/31 Bal.	43992
		12/31 Bal.	43992

Maintenance and Repairs Expense
12/31 Bal.	3529
12/31 Bal.	3529

Depreciation Expense
12/31 Bal.	2880
12/31 Bal.	2880

Insurance Expense
12/31 Bal.	1351
12/31 Bal.	1351

Salaries and Wages Expense
12/31 Bal.	35260
12/31 Bal.	35260

Utilities Expense
12/31 Bal.	4448
12/31 Bal.	4448

Part D

Blossom Company Post closing trial balance December 31, 2017
	Debit	Credit
Cash	6444
Accounts receivable	7450
Prepaid insurance	2023
Equipment	33902
Accumulated depreciation		10743
Accounts payable		11131
Salaries payable		3287
Share capital –ordinary		20000
Retained earnings		4658
Less: accumulated depreciation	$49819	$49819