The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31. No. Account Title Debit Credit 101 Cash $ 18,000 126 Supplies 12,100 128 Prepaid insurance 2,000 167 Equipment 23,000 168 Accumulated depreciation—Equipment $ 6,500 307 Common stock 9,295 318 Retained earnings 34,600 319 Dividends 6,000 404 Services revenue 46,200 612 Depreciation expense—Equipment 2,000 622 Salaries expense 26,935 637 Insurance expense 1,940 640 Rent expense 3,095 652 Supplies expense 1,525 Totals $ 96,595 $ 96,595 1. Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901. 2. Prepare the December 31, post-closing trial balance for Cruz Company. Note: The Retained Earnings account balance was $34,600 on December 31 of the prior year.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The following adjusted
| No. | Account Title | Debit | Credit | ||||
| 101 | Cash | $ | 18,000 | ||||
| 126 | Supplies | 12,100 | |||||
| 128 | Prepaid insurance | 2,000 | |||||
| 167 | Equipment | 23,000 | |||||
| 168 | $ | 6,500 | |||||
| 307 | Common stock | 9,295 | |||||
| 318 | 34,600 | ||||||
| 319 | Dividends | 6,000 | |||||
| 404 | Services revenue | 46,200 | |||||
| 612 | Depreciation expense—Equipment | 2,000 | |||||
| 622 | Salaries expense | 26,935 | |||||
| 637 | Insurance expense | 1,940 | |||||
| 640 | Rent expense | 3,095 | |||||
| 652 | Supplies expense | 1,525 | |||||
| Totals | $ | 96,595 | $ | 96,595 | |||
1. Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901.
2. Prepare the December 31, post-closing trial balance for Cruz Company. Note: The Retained Earnings account balance was $34,600 on December 31 of the prior year.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
