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Adjusting and Closing Entries Brushstroke Art Studio, Inc., provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31. This is the studio's unadjusted trial balance dated December 31, current year. BRUSHSTROKE ART STUDIO, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, CURRENT YEAR Debits |Credits Cash $22,380 Client fees receivable 71,250 Supplies 6,000 Prepaid studio rent 2,500 Studio equipment 96,000 Accumulated depreciation: studio equipment $52,000 Accounts payable 6,420 Note payable 24,000 Interest payable 480 Uneamed client fees 8,000 Income taxes payable 5,000 Capital stock 50,000 Retained earnings 20,000

Adjusting and Closing Entries Brushstroke Art Studio, Inc., provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31. This is the studio's unadjusted trial balance dated December 31, current year. BRUSHSTROKE ART STUDIO, INC. UNADJUSTED TRIAL BALANCE DECEMBER 31, CURRENT YEAR Debits |Credits Cash $22,380 Client fees receivable 71,250 Supplies 6,000 Prepaid studio rent 2,500 Studio equipment 96,000 Accumulated depreciation: studio equipment $52,000 Accounts payable 6,420 Note payable 24,000 Interest payable 480 Uneamed client fees 8,000 Income taxes payable 5,000 Capital stock 50,000 Retained earnings 20,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Depreciation expense: studio equipment Income taxes expense 8,800 Adjusting and Closing Entries 5,000 Totals $248,210| $248,210 Brushstroke Art Studio, Inc., provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31. This is the studio's unadjusted trial balance dated December 31, current year. Other Data 1. Supplies on hand at December 31, current year, total $1,000. 2. The studio pays rent quarterly (every three months). The last payment was made November 1, current year. The next payment will be made early in February, next BRUSHSTROKE ART STUDIO, INC. UNADJUSTED TRIAL BALANCE year. DECEMBER 31, CURRENT YEAR 3. Studio equipment is being depreciated over 120 months (10 years). 4. On October 1, current year, the studio borrowed $24,000 by signing a 12-month, 12 percent note payable. The entire amount, plus interest, is due on September 30, Debits |Credits Cash $22,380 Client fees receivable 71,250 next year. Supplies 6,000 5. At December 31, current year, $3,000 of previously unearned client fees had been Prepaid studio rent 2,500 earned. Studio equipment 96,000 6. Accrued, but unrecorded and uncollected client fees earned total $690 at Decembe Accumulated depreciation: studio equipment $52,000 Accounts payable 6,420 31, current year. Note payable 7. Accrued, but unrecorded and unpaid salary expense totals $750 at December 31, 24,000 Interest payable 480 current year. 8. Accrued income taxes expense for the entire year ending December 31, current year, total $7,000. The full amount is due early in the next year. Unearned client fees 8,000 Income taxes payable 5,000 Capital stock 50,000 Instructions Retained earnings 20,000 1. Prepare the necessary year-end closing entries. 2. Prepare an after-closing trial balance. Client fees earned 82,310 Supplies expense 4,000 Salary expense 17,250 Fim do documento Interest expense 480 Studio rent expense 11,250 Utilities expense 3,300
Transcribed Image Text:Depreciation expense: studio equipment Income taxes expense 8,800 Adjusting and Closing Entries 5,000 Totals $248,210| $248,210 Brushstroke Art Studio, Inc., provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31. This is the studio's unadjusted trial balance dated December 31, current year. Other Data 1. Supplies on hand at December 31, current year, total $1,000. 2. The studio pays rent quarterly (every three months). The last payment was made November 1, current year. The next payment will be made early in February, next BRUSHSTROKE ART STUDIO, INC. UNADJUSTED TRIAL BALANCE year. DECEMBER 31, CURRENT YEAR 3. Studio equipment is being depreciated over 120 months (10 years). 4. On October 1, current year, the studio borrowed $24,000 by signing a 12-month, 12 percent note payable. The entire amount, plus interest, is due on September 30, Debits |Credits Cash $22,380 Client fees receivable 71,250 next year. Supplies 6,000 5. At December 31, current year, $3,000 of previously unearned client fees had been Prepaid studio rent 2,500 earned. Studio equipment 96,000 6. Accrued, but unrecorded and uncollected client fees earned total $690 at Decembe Accumulated depreciation: studio equipment $52,000 Accounts payable 6,420 31, current year. Note payable 7. Accrued, but unrecorded and unpaid salary expense totals $750 at December 31, 24,000 Interest payable 480 current year. 8. Accrued income taxes expense for the entire year ending December 31, current year, total $7,000. The full amount is due early in the next year. Unearned client fees 8,000 Income taxes payable 5,000 Capital stock 50,000 Instructions Retained earnings 20,000 1. Prepare the necessary year-end closing entries. 2. Prepare an after-closing trial balance. Client fees earned 82,310 Supplies expense 4,000 Salary expense 17,250 Fim do documento Interest expense 480 Studio rent expense 11,250 Utilities expense 3,300
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