Financial Statements and Closing Entries The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2018, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows: The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 2018 Adjusted Trial Balance Account Title Dr. Cr. Cash $13,350 Accounts Receivable 29,060 Supplies 4,540 Prepaid Insurance 9,810 Land 103,000 Buildings 371,000 Accumulated Depreciation-Buildings 120,900 Equipment 268,000 Accumulated Depreciation-Equipment 157,500 Accounts Payable 34,370 Salaries Payable 3,410 Unearned Rent 1,540 Common Stock 154,000 Retained Earnings 286,340 Dividends 25,800 Service Fees 490,090 Rent Revenue 5,180 Salaries Expense 351,350 Depreciation Expense-Equipment 19,100 Rent Expense 16,000 Supplies Expense 11,300 Utilities Expense 10,220 Depreciation Expense-Buildings 6,810 Repairs Expense 5,630 Insurance Expense 3,090 Miscellaneous Expense 5,270 1,253,330 1,253,330 Required: 1. Prepare an income statement. The Gorman Group Income Statement For the Year Ended October 31, 2018 Revenues: fill in the blank 2 fill in the blank 4 Total Revenues fill in the blank 5 Expenses: fill in the blank 7 fill in the blank 9 fill in the blank 11 fill in the blank 13 fill in the blank 15 fill in the blank 17 fill in the blank 19 fill in the blank 21 fill in the blank 23 Total Expenses fill in the blank 24 Net income fill in the blank 25 Prepare a Retained Earnings Statement. The Gorman Group Retained Earnings Statement For the Year Ended October 31, 2018 fill in the blank 27 fill in the blank 29 fill in the blank 31 fill in the blank 33 fill in the blank 35 Prepare a balance sheet. The Gorman Group Balance Sheet October 31, 2018 Assets Liabilities Current assets: Current liabilities: fill in the blank 37 fill in the blank 39 fill in the blank 41 fill in the blank 43 fill in the blank 45 fill in the blank 47 fill in the blank 49 Total liabilities fill in the blank 50 Total current assets fill in the blank 51 Property, plant, and equipment: Stockholders' Equity fill in the blank 53 fill in the blank 55 fill in the blank 57 fill in the blank 59 fill in the blank 61 fill in the blank 63 fill in the blank 65 fill in the blank 67 fill in the blank 69 Total property, plant, and equipment fill in the blank 70 Total stockholders' equity fill in the blank 71 Total assets fill in the blank 72 Total liabilities and stockholders' equity fill in the blank 73 2. Journalize the entries that were required to close the accounts at October 31. For a compound transaction, if a box does not require an entry, leave it blank. Date Account Debit Credit 2018 Oct. 31 Close revenues fill in the blank 75 fill in the blank 76 fill in the blank 78 fill in the blank 79 fill in the blank 81 fill in the blank 82 Oct. 31 Close expenses fill in the blank 84 fill in the blank 85 fill in the blank 87 fill in the blank 88 fill in the blank 90 fill in the blank 91 fill in the blank 93 fill in the blank 94 fill in the blank 96 fill in the blank 97 fill in the blank 99 fill in the blank 100 fill in the blank 102 fill in the blank 103 fill in the blank 105 fill in the blank 106 fill in the blank 108 fill in the blank 109 fill in the blank 111 fill in the blank 112 Oct. 31 Close income/loss fill in the blank 114 fill in the blank 116 Oct. 31 Close dividends fill in the blank 118 fill in the blank 120 3. If Retained Earnings had instead decreased $36,100 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? Enter all amounts as positive numbers. $________ (Net income or Net loss)
Financial Statements and Closing Entries The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2018, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows: The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 2018 Adjusted Trial Balance Account Title Dr. Cr. Cash $13,350 Accounts Receivable 29,060 Supplies 4,540 Prepaid Insurance 9,810 Land 103,000 Buildings 371,000 Accumulated Depreciation-Buildings 120,900 Equipment 268,000 Accumulated Depreciation-Equipment 157,500 Accounts Payable 34,370 Salaries Payable 3,410 Unearned Rent 1,540 Common Stock 154,000 Retained Earnings 286,340 Dividends 25,800 Service Fees 490,090 Rent Revenue 5,180 Salaries Expense 351,350 Depreciation Expense-Equipment 19,100 Rent Expense 16,000 Supplies Expense 11,300 Utilities Expense 10,220 Depreciation Expense-Buildings 6,810 Repairs Expense 5,630 Insurance Expense 3,090 Miscellaneous Expense 5,270 1,253,330 1,253,330 Required: 1. Prepare an income statement. The Gorman Group Income Statement For the Year Ended October 31, 2018 Revenues: fill in the blank 2 fill in the blank 4 Total Revenues fill in the blank 5 Expenses: fill in the blank 7 fill in the blank 9 fill in the blank 11 fill in the blank 13 fill in the blank 15 fill in the blank 17 fill in the blank 19 fill in the blank 21 fill in the blank 23 Total Expenses fill in the blank 24 Net income fill in the blank 25 Prepare a Retained Earnings Statement. The Gorman Group Retained Earnings Statement For the Year Ended October 31, 2018 fill in the blank 27 fill in the blank 29 fill in the blank 31 fill in the blank 33 fill in the blank 35 Prepare a balance sheet. The Gorman Group Balance Sheet October 31, 2018 Assets Liabilities Current assets: Current liabilities: fill in the blank 37 fill in the blank 39 fill in the blank 41 fill in the blank 43 fill in the blank 45 fill in the blank 47 fill in the blank 49 Total liabilities fill in the blank 50 Total current assets fill in the blank 51 Property, plant, and equipment: Stockholders' Equity fill in the blank 53 fill in the blank 55 fill in the blank 57 fill in the blank 59 fill in the blank 61 fill in the blank 63 fill in the blank 65 fill in the blank 67 fill in the blank 69 Total property, plant, and equipment fill in the blank 70 Total stockholders' equity fill in the blank 71 Total assets fill in the blank 72 Total liabilities and stockholders' equity fill in the blank 73 2. Journalize the entries that were required to close the accounts at October 31. For a compound transaction, if a box does not require an entry, leave it blank. Date Account Debit Credit 2018 Oct. 31 Close revenues fill in the blank 75 fill in the blank 76 fill in the blank 78 fill in the blank 79 fill in the blank 81 fill in the blank 82 Oct. 31 Close expenses fill in the blank 84 fill in the blank 85 fill in the blank 87 fill in the blank 88 fill in the blank 90 fill in the blank 91 fill in the blank 93 fill in the blank 94 fill in the blank 96 fill in the blank 97 fill in the blank 99 fill in the blank 100 fill in the blank 102 fill in the blank 103 fill in the blank 105 fill in the blank 106 fill in the blank 108 fill in the blank 109 fill in the blank 111 fill in the blank 112 Oct. 31 Close income/loss fill in the blank 114 fill in the blank 116 Oct. 31 Close dividends fill in the blank 118 fill in the blank 120 3. If Retained Earnings had instead decreased $36,100 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? Enter all amounts as positive numbers. $________ (Net income or Net loss)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Question
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Financial Statements and Closing Entries
The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2018, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:
The Gorman Group
End-of-Period Spreadsheet
For the Year Ended October 31, 2018Adjusted Trial Balance Account Title Dr. Cr. Cash $13,350 Accounts Receivable 29,060 Supplies 4,540 Prepaid Insurance 9,810 Land 103,000 Buildings 371,000 Accumulated Depreciation -Buildings120,900 Equipment 268,000 Accumulated Depreciation-Equipment 157,500 Accounts Payable 34,370 Salaries Payable 3,410 Unearned Rent 1,540 Common Stock 154,000 Retained Earnings 286,340 Dividends 25,800 Service Fees 490,090 Rent Revenue 5,180 Salaries Expense 351,350 Depreciation Expense-Equipment 19,100 Rent Expense 16,000 Supplies Expense 11,300 Utilities Expense 10,220 Depreciation Expense-Buildings 6,810 Repairs Expense 5,630 Insurance Expense 3,090 Miscellaneous Expense 5,270 1,253,330 1,253,330
Required:
1. Prepare an income statement.
The Gorman Group
Income Statement
For the Year Ended October 31, 2018Revenues: fill in the blank 2 fill in the blank 4 Total Revenues fill in the blank 5 Expenses: fill in the blank 7 fill in the blank 9 fill in the blank 11 fill in the blank 13 fill in the blank 15 fill in the blank 17 fill in the blank 19 fill in the blank 21 fill in the blank 23 Total Expenses fill in the blank 24 Net income fill in the blank 25 Prepare a Retained Earnings Statement.
The Gorman Group
Retained Earnings Statement
For the Year Ended October 31, 2018fill in the blank 27 fill in the blank 29 fill in the blank 31 fill in the blank 33 fill in the blank 35 Prepare a
balance sheet .The Gorman Group
Balance Sheet
October 31, 2018Assets Liabilities Current assets: Current liabilities: fill in the blank 37 fill in the blank 39 fill in the blank 41 fill in the blank 43 fill in the blank 45 fill in the blank 47 fill in the blank 49 Total liabilities fill in the blank 50 Total current assets fill in the blank 51 Property, plant, and equipment: Stockholders' Equity fill in the blank 53 fill in the blank 55 fill in the blank 57 fill in the blank 59 fill in the blank 61 fill in the blank 63 fill in the blank 65 fill in the blank 67 fill in the blank 69 Total property, plant, and equipment fill in the blank 70 Total stockholders' equity fill in the blank 71 Total assets fill in the blank 72 Total liabilities and stockholders' equity fill in the blank 73 2.
Journalize the entries that were required to close the accounts at October 31. For a compound transaction, if a box does not require an entry, leave it blank.Date Account Debit Credit 2018 Oct. 31 Close revenues fill in the blank 75 fill in the blank 76 fill in the blank 78 fill in the blank 79 fill in the blank 81 fill in the blank 82 Oct. 31 Close expenses fill in the blank 84 fill in the blank 85 fill in the blank 87 fill in the blank 88 fill in the blank 90 fill in the blank 91 fill in the blank 93 fill in the blank 94 fill in the blank 96 fill in the blank 97 fill in the blank 99 fill in the blank 100 fill in the blank 102 fill in the blank 103 fill in the blank 105 fill in the blank 106 fill in the blank 108 fill in the blank 109 fill in the blank 111 fill in the blank 112 Oct. 31 Close income/loss fill in the blank 114 fill in the blank 116 Oct. 31 Close dividends fill in the blank 118 fill in the blank 120 3. If Retained Earnings had instead decreased $36,100 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? Enter all amounts as positive numbers.
$________ (Net income or Net loss)
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