Preparing
trial balances, closing entries, and financial statements
P4-3A
Preparing trial balances, closing entries, and
financial statements
P4-3A
Preparing trial balances, closing entries, and financial statements
KOBE REPAIRS
Adjusted Trial Balance
December 31, 2011
No.
Account Title Debit Credit
101
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,000
124
Office supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200
128
Prepaid insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 1,950
167
Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,000
168
Accumulated depreciation—Equipment . . . . . . . . $ 4,000
201
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
210
Wages payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
301
S. Kobe, Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
302
S. Kobe, Withdrawals . . . . . . . . . . . . . . . . . . . . . . . 15,000
401
Repair fees earned . . . . . . . . . . . . . . . . . . . . . . . . . 77,750
612
Depreciation expense—Equipment . . . . . . . . . . . . 4,000
623
Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,500
637
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . 700
640
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,600
650
Office supplies expense . . . . . . . . . . . . . . . . . . . . . 2,600
690
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700
Totals
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,250 $134,250
Required
1.
Prepare an income statement and a statement of owner’s equity for the year
2011, and a classified balance sheet at December 31, 2011. There are no owner
investments in 2011.
2.
Enter the adjusted trial balance in the first two columns of a six-column
table. Use columns three and four for closing entry information and the last
two columns for a post-closing trial balance. Insert an Income Summary account
as the last item in the trial balance.
3.
Enter closing entry information in the six-column table and prepare journal
entries for it.
Analysis Component
4.
Assume for this part only that
a.
None of the $700 insurance expense had expired during the year. Instead, assume
it is a prepayment of the next period’s insurance protection.
b.
There are no earned and unpaid wages at the end of the year. (Hint: Reverse
the $500 wages payable accrual.) Describe the financial statement changes that
would result from these two assumptions.
Check
(1)
Ending capital balance, $47,650; net income, $22,650
(2)
P-C trial balance totals, $64,150
SOLUTION
PREVIEW
KOBE
REPAIRS
For
year Ended December 31, 2011
|
|||||||||
Adjusted
Trial balance
|
Closing
Entries
|
Post-closing
Trial Balance
|
|||||||
No.
|
Account Title
|
Debit
|
Credit
|
(Jnl.)
|
Debit
|
(Jnl.)
|
Credit
|
Debit
|
Credit
|
101
|
Cash
|
13,000
|
13,000
|
||||||
124
|
1,200
|
1,200
|
|||||||
128
|
Prepaid
insurance
|
1,950
|
1,950
|
||||||
File name: P4-3A-Preparing-trial-balances.xls
File type: XLS Price: $12
