J. Smarly is a lawyer in practice by herself. The adjusted trial balance columns of the work sheet for J. Smarly, at June 30, 2018 are as follows: J. Smarly, Lawyer Adjusted Trial Balance For the Month Ended June 30, 2018 Cash $25,000 Accounts receivable 9,000 Prepaid insurance 1,000 100,000 Land Building Accumulated amortization, building Notes payable Accounts payable Interest payable Mortgage payable J. Smarly, Capital J. Smarly, Drawings Legal fees Salaries expense 300,000 $100,000 50,000 20,000 1,000 150,000 101,900 2,000 23,000 4,000 Insurance expense 300 Amortization expense 1,000 Supplies expense 500 Interest expense Utilities expense 1,000 700 400 Property tax expense Promotional expenses 1,000 $445,900 $445,900 Instructions (a) Prepare a classified balance sheet at June 30, 2018. Assume that the mortgage liability is the only long-term liability. (b) Journalize the closing entries from the adjusted trial balance (assuming the books are closed quarterly). Action Plan In preparing a classified balance sheet, know the contents of each section. Assets should be listed in order of liquidity. In journalizing closing entries, remember that there are only three entries-one to close revenues, one to close expenses, and one to close owner's drawings directly to the owner's capital account.
J. Smarly is a lawyer in practice by herself. The adjusted trial balance columns of the work sheet for J. Smarly, at June 30, 2018 are as follows: J. Smarly, Lawyer Adjusted Trial Balance For the Month Ended June 30, 2018 Cash $25,000 Accounts receivable 9,000 Prepaid insurance 1,000 100,000 Land Building Accumulated amortization, building Notes payable Accounts payable Interest payable Mortgage payable J. Smarly, Capital J. Smarly, Drawings Legal fees Salaries expense 300,000 $100,000 50,000 20,000 1,000 150,000 101,900 2,000 23,000 4,000 Insurance expense 300 Amortization expense 1,000 Supplies expense 500 Interest expense Utilities expense 1,000 700 400 Property tax expense Promotional expenses 1,000 $445,900 $445,900 Instructions (a) Prepare a classified balance sheet at June 30, 2018. Assume that the mortgage liability is the only long-term liability. (b) Journalize the closing entries from the adjusted trial balance (assuming the books are closed quarterly). Action Plan In preparing a classified balance sheet, know the contents of each section. Assets should be listed in order of liquidity. In journalizing closing entries, remember that there are only three entries-one to close revenues, one to close expenses, and one to close owner's drawings directly to the owner's capital account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:J. Smarly is a lawyer in practice by herself. The adjusted trial balance columns of the
work sheet for J. Smarly, at June 30, 2018 are as follows:
J. Smarly, Lawyer
Adjusted Trial Balance
For the Month Ended June 30, 2018
Cash
$25,000
9,000
1,000
Accounts receivable
Prepaid insurance
Land
100,000
300,000
Building
Accumulated amortization, building
Notes payable
Accounts payable
Interest payable
Mortgage payable
J. Smarly, Capital
J. Smarly, Drawings
Legal fees
Salaries expense
$100,000
50,000
20,000
1,000
150,000
101,900
2,000
23,000
4,000
300
Insurance expense
Amortization expense
Supplies expense
Interest expense
Utilities expense
1,000
500
1,000
700
Property tax expense
Promotional expenses
400
1,000
$445,900
$445,900
Instructions
(a) Prepare a classified balance sheet at June 30, 2018. Assume that the mortgage
liability is the only long-term liability.
(b) Journalize the closing entries from the adjusted trial balance (assuming the books are
closed quarterly).
Action Plan
In preparing a classified balance sheet, know the contents of each section. Assets
should be listed in order of liquidity.
In journalizing closing entries, remember that there are only three entries-one to
close revenues, one to close expenses, and one to close owner's drawings directly
to the owner's capital account.
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