Question

Credit $ Debit 7,500 24,000 8,500 8,700 55,000 $ 27,500 150,000 50,000 72,050 Adjusted Trial Balance December 31, 2019 No. Account Title 101 Cash 104 Short-term investments 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 173 Building 174 Accumulated depreciation-Building 183 Land 201 Accounts payable 203 Interest payable 208 Rent payable 210 Wages payable 213 Property taxes payable 233 Unearned professional fees 244 Current portion of long term note payable 251 Long-term notes payable 307 Common stock 318 Retained earnings 319 Dividends 401 Professional fees earned 406 Rent earned 407 Dividends earned 409 Interest earned 606 Depreciation expense-Building 612 Depreciation expense-Equipment 623 Wages expense 633 Interest expense 637 Insurance expense 640 Rent expense 652 Supplies expense 682 Postage expense 683 Property taxes expense 684 Repairs expense 688 Telephone expense 690 Utilities expense Totals 15,000 2,300 3,700 2,300 1,300 7,800 7,000 60,000 7,500 121,400 10,500 104,000 16,000 2,700 2,800 11,000 8,250 26,500 3,800 7,500 12,800 6,700 2,200 3,700 6,900 2,500 3,200 $431,300 $431,300 O. Tybalt invested $7,500 cash in the business in exchange for common stock during year 2019. The December 31, 2018, credit balance of the Retained Earnings account was $121,400. Required: 1a. Prepare the income statement for the calendar-year 2019. 1b. Prepare the statement of retained earnings for the calendar-year 2019. 1c. Prepare the classified balance sheet at December 31, 2019. 2. Prepare the necessary closing entries at December 31, 2019.

Answer 1

1a_Income Statement Particulars Professional fees Rent earned Dividend earned Interest earned Total Revenue Amount $ 104,000 $ 16,000 $ 2,700 $ 2,800 $ 125,500 Less: Expenses Wages expense Rent expense Depreciaion expense-Building Depreciaion expense-Equipment Insurance expense Repairs expense Supplies expense Interest expense Property tax expense Utilities expense Telephone expense Postage expense 26,500 12,800 11,000 8,250 7,500 6,900 6,700 3,800 3,700 3,200 2,500 2,200

Total expenses $ 95,050 Net Income $ 30,450 1b) Statement of Retained Earnings Openig Balance Add: Profit for the year Less: Dividend Closing Balance $ $ $ $ 121,400 30,450 (10,500) 141,350 Amount 1c) Balance Sheet Assets Current Assets Cash Short term Investments Supplies Prepaid Insurance Total Current Assets $ $ $ $ $ 7,500 24,000 8,500 8,700 48,700 Non Current Assets Equipment Less: Accumulated depreciation $ $ 55,000 (27,500) $ 27,500

$ $ Building Less: Accumulated depreciation Land Total Non Current Assets 150,000 (50,000) $ 100,000 $ 72,050 $ 199,550 Total Assets $ 248,250 $ $ $ Liabilities and Equity Current Liabilities Accounts Payable Interest Payable Rent Payable Wages Payable Property tax payable Unearned Professional fees Current portion of long term Notes payable Total Current Liabilities $ $ $ $ 15,000 2,300 3,700 2,300 1,300 7,800 7,000 39,400

Non Current Liabilities Long term Notes Payable Total Non Current Liabilities $ $ 60,000 60,000 Equity Common stock Retained Earnings Total Equity $ $ $ 7,500 141,350 148,850 Total Liabilities and Equity $ 248,250 Credit 2) Closing entry Particulars Professional fees Rent earned Dividend earned Interest earned To Wages expense To Rent expense To Depreciaion expense-Building To Depreciaion expense-Equipment Debit $ 104,000 $ 16,000 $ 2,700 2,800 $ 26,500 12,800 11,000 8,250 $ $

$ To Depreciaion expense-Building To Depreciaion expense-Equipment To Insurance expense To Repairs expense To Supplies expense To Interest expense To Property tax expense To Utilities expense To Telephone expense To Postage expense To Summary of Profiy & Loss 11,000 8,250 7,500 6,900 6,700 3,800 3,700 3,200 2,500 2,200 30,450 $ $ 30,450 Summary of Profiy & Loss To Retained Earnings $ 30,450