Ferraro Consulting provides risk management services to individuals and to corporate clients. The company closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report: The firm’s statement of retained earnings indicates that a $25,000 cash dividend was declared and paid in 2011. a. Prepare the necessary closing entries on December 31, 2011. b. If the firm’s Retained Earnings account had a $300,000 balance on January 1, 2011, at what amount should Retained Earnings be reported in the firm’s balance sheet dated December 31, 2011?
Ferraro Consulting provides risk management services to individuals and to corporate clients. The company closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report: The firm’s statement of retained earnings indicates that a $25,000 cash dividend was declared and paid in 2011. a. Prepare the necessary closing entries on December 31, 2011. b. If the firm’s Retained Earnings account had a $300,000 balance on January 1, 2011, at what amount should Retained Earnings be reported in the firm’s balance sheet dated December 31, 2011?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Ferraro Consulting provides risk management services to individuals and to corporate clients. The company closes its temporary accounts once each year on December 31. The company recently issued the following income statement as part of its annual report:
The firm’s statement of
a. Prepare the necessary closing entries on December 31, 2011.
b. If the firm’s Retained Earnings account had a $300,000 balance on January 1, 2011, at what amount should Retained Earnings be reported in the firm’s
Transcribed Image Text:FERRARO CONSULTING
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2011
Revenue:
Consulting revenue individual clients
Consulting revenue-corporate clients
$ 40,000
160,000
$200,000
Expenses:
Advertising expense .
Depreciation expense: computers
Rent expense..
Office supplies expense
Travel expense.
Utilities expense
Telephone and Internet expense
Salaries expense
Interest expense
Net loss
$ 16,000
24,000
9,600
4,400
57,800
3,300
1,900
155,500
2,500
275,000
$ (75,000)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education