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 ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. 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)

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