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.Prepare the necessary closing entries on December 31, 2011.If the firm’s Retained Earnings account had a $300,000 balance on January 1, 2011, at what amount should Retained Earnings be reported in the firm’s balance sheet dated December 31, 2011? FERRARO CONSULTINGINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2011Revenue:Consulting revenue-individual clientsConsulting revenue-corporate clients$ 40,000160,000$200,000Expenses:Advertising expenseDepreciation expense: computersRent expenseOffice supplies expenseTravel expense .Utilities expense..Telephone and Internet expenseSalaries expenseInterest expenseNet loss$ 16,00024,0009,6004,40057,8003,3001,900155,5002,500275,000$ (75,000)

Total revenue=Consulting revenue Individidual+Consulting revenue corporate=$40,000+$160,000=$200,000

Answered: Ferraro Consulting provides risk…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

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 retained earnings indicates that a $25,000 cash dividend was declared and paid in 2011.

Prepare the necessary closing entries on December 31, 2011.
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
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

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions