Requirement – 1 To determine Prepare the closing entries for each of the separate cases at December 31. Explanation Closing entries: Closing entries are those journal entries , which are passed to transfer the final balances of temporary accounts, (all revenues account, all expenses account and dividend) to the income summary account. Closing entries produce a zero balance in each temporary account. The closing entries for each of the separate cases are as follows: Case A: Sole proprietorship: Sole proprietorship: It is one form of simple business that is owned and maintained by a single person. Set up of very simple and taking care of business is very easy. Government provides tax advantages for these firms. Date Accounts title and explanation Ref. Debit ($) Credit ($) December, 31 Proprietor A’s Capital 20,000 Individual revenue account 144,000 Individual expense account 164,000 (To record closing entries of revenue and expenses accounts) Table (1) Date Accounts title and explanation Ref. Debit ($) Credit ($) December, 31 Proprietor A’s Capital 9,000 Proprietor A’s Drawings 9,000 (To record drawing account transferred to the capital account) Table (2) In this closing entry, the revenue account is closed by transferring the amount of revenue to the proprietor A’s capital account in order to bring the revenue accounts balance to zero. In this closing entry, expenses account is closed by transferring the amount of all expenses to the proprietor A’s capital account in order to bring all the expense accounts balance to zero. In this closing entry, drawings account is closed by transferring the amount of drawings to the proprietor A’s capital account in order to bring drawings accounts balance to zero. Case B: Partnership : Partnership: Partnership firms are started by two or more individuals joining together. This form of partnership is very easy to establish and there is a shared control. The duties and formalities of the concern are formalized by making a partnership agreement. In this type of company, individuals with similar interest join together and startup a business. As previously stated for sole proprietorship, partnership firms too enjoy tax advantages. Date Accounts title and explanation Ref... Requirement – 2 To determine Prepare the equity section of balance sheet for case A and B at December 31.

10th Edition

ISBN: 9781266449512

Author: Libby

Publisher: MCG

See similar textbooks

Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

Videos

Question

Chapter 11, Problem 12P

Requirement – 1

To determine

Prepare the closing entries for each of the separate cases at December 31.

Requirement – 2

To determine

Prepare the equity section of balance sheet for case A and B at December 31.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 11, Problem 11P

Chapter 11, Problem 1AP

Students have asked these similar questions

5 POINTS

What is the unaccounted variance

general accounting

Chapter 11 Solutions

FINANCIAL ACCOUNTING (LL)

Ch. 11 - Prob. 1Q Ch. 11 - Prob. 2Q Ch. 11 - 3. Explain each of the following terms: (a)...Ch. 11 - 4. Differentiate between common stock and...Ch. 11 - Prob. 5Q Ch. 11 - 6. Define additional paid-in capital. Ch. 11 - 7. Explain the difference between contributed...Ch. 11 - Prob. 8Q Ch. 11 - Prob. 9Q Ch. 11 - 10. What are the two basic requirements to support...

Ch. 11 - Prob. 11Q Ch. 11 - Prob. 12Q Ch. 11 - 13. Identify and explain the three important dates...Ch. 11 - 14. What are the usual characteristics of...Ch. 11 - 15. Differentiate between cumulative and...Ch. 11 - Prob. 1MCQ Ch. 11 - Prob. 2MCQ Ch. 11 - Prob. 3MCQ Ch. 11 - 4. Which order best describes the largest number...Ch. 11 - Prob. 5MCQ Ch. 11 - 6. Which of the following dates does not require a...Ch. 11 - 7. A company has net income of $225,000 and...Ch. 11 - Prob. 8MCQ Ch. 11 - Prob. 9MCQ Ch. 11 - 10. Conceptually, does a 2-for-1 stock dividend...Ch. 11 - Prob. 1ME Ch. 11 - Prob. 2ME Ch. 11 - Earnings per Share Ratio How is the earnings per...Ch. 11 - Prob. 4ME Ch. 11 - Prob. 5ME Ch. 11 - Prob. 6ME Ch. 11 - Prob. 7ME Ch. 11 - Prob. 8ME Ch. 11 - Dividend Yield Ratio How is the dividend yield...Ch. 11 - Prob. 10ME Ch. 11 - Prob. 11ME Ch. 11 - Prob. 1E Ch. 11 - Computing Number of Shares The charter of Vista...Ch. 11 - Determining the Effects of the Issuance of Common...Ch. 11 - Prob. 4E Ch. 11 - Reporting Stockholders’ Equity and Determining...Ch. 11 - Assume that the stockholders’ equity section on...Ch. 11 - Reporting Stockholders’ Equity Williamson...Ch. 11 - Ruth’s Chris Steakhouse is the largest upscale...Ch. 11 - Prob. 9E Ch. 11 - Below is select information from DC United...Ch. 11 - Prob. 11E Ch. 11 - Prob. 12E Ch. 11 - Recording and Analyzing Treasury Stock...Ch. 11 - Prob. 14E Ch. 11 - Prob. 15E Ch. 11 - Prob. 16E Ch. 11 - Analyzing the Impact of Dividend Policy Peters and...Ch. 11 - Prob. 18E Ch. 11 - Service Corporation has the following capital...Ch. 11 - Recording the Payment of Dividends A recent annual...Ch. 11 - Procter & Gamble (P&G) brands touch the lives of...Ch. 11 - Prob. 22E Ch. 11 - Comparing Stock Dividends and Stock Splits On July...Ch. 11 - Prob. 24E Ch. 11 - Prob. 25E Ch. 11 - Prob. 1P Ch. 11 - Prob. 2P Ch. 11 - Prob. 3P Ch. 11 - Prob. 4P Ch. 11 - Prob. 5P Ch. 11 - Prob. 6P Ch. 11 - Apple designs, manufactures, and markets mobile...Ch. 11 - Prob. 8P Ch. 11 - Analyzing Dividend Policy Heather and Scott, two...Ch. 11 - Prob. 10P Ch. 11 - Prob. 11P Ch. 11 - (Chapter Supplement) Comparing Stockholders’...Ch. 11 - Prob. 1AP Ch. 11 - Prob. 2AP Ch. 11 - Preparing the Stockholders’ Equity Section after...Ch. 11 - Prob. 4AP Ch. 11 - Prob. 1CON Ch. 11 - Prob. 1ACOMP Ch. 11 - Prob. 1BCOMP Ch. 11 - Prob. 1CCOMP Ch. 11 - Prob. 1DCOMP Ch. 11 - Prob. 1CP Ch. 11 - Prob. 2CP Ch. 11 - Prob. 3CP Ch. 11 - Prob. 4CP Ch. 11 - Prob. 5CP Ch. 11 - Evaluating an Ethical Dilemma You are the...

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.