Evan Roberts owns a business, Shore Sports, that rents canoes and kayaks. Below is the adjusted trial balance at December 31. Account No. Debit Balances Credit Balances Cash 11 1,500 Accounts Receivable 12 2,000 Interest Receivable 13 100 Prepaid Insurance 14 1,600 Notes Receivable (long-term) 16 2,800 Equipment 18 15,000 Accumulated Depreciation 19 3,000 Accounts Payable 21 2,400 Accrued Expenses Payable 22 3,920 Income Taxes Payable 23 2,700 Unearned Rent Fees 25 500 Evan Roberts, Capital 31 7,700 Evan Roberts, Drawing 32 2,000 Rent Fees Earned 41 37,000 Furniture Rental Revenue 42 1,200 Interest Revenue 43 100 Wages Expense 51 19,000 Depreciation Expense 52 1,800 Utilities Expense 53 320 Insurance Expense 54 700 Maintenance Expense 55 9,000 Income Tax Expense 56 2,700 Totals 58,520 58,520 The entry required to close the expense accounts at the end of the period will a.decrease Owner's Capital by $33,520 b.increase Owner's Capital by $33,520 c.decrease Owner's Capital by $35,520 d.increase Owner's Capital by $35,520

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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Evan Roberts owns a business, Shore Sports, that rents canoes and kayaks. Below is the adjusted trial balance at December 31.

	Account No.	Debit Balances	Credit Balances
Cash	11	1,500
Accounts Receivable	12	2,000
Interest Receivable	13	100
Prepaid Insurance	14	1,600
Notes Receivable (long-term)	16	2,800
Equipment	18	15,000
Accumulated Depreciation	19		3,000
Accounts Payable	21		2,400
Accrued Expenses Payable	22		3,920
Income Taxes Payable	23		2,700
Unearned Rent Fees	25		500
Evan Roberts, Capital	31		7,700
Evan Roberts, Drawing	32	2,000
Rent Fees Earned	41		37,000
Furniture Rental Revenue	42		1,200
Interest Revenue	43		100
Wages Expense	51	19,000
Depreciation Expense	52	1,800
Utilities Expense	53	320
Insurance Expense	54	700
Maintenance Expense	55	9,000
Income Tax Expense	56	2,700
Totals		58,520	58,520

The entry required to close the expense accounts at the end of the period will

a.decrease Owner's Capital by $33,520

b.increase Owner's Capital by $33,520

c.decrease Owner's Capital by $35,520

d.increase Owner's Capital by $35,520

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