Intermediate Accounting
9th Edition
ISBN: 9781259722660
Author: J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher: McGraw-Hill Education
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Chapter 2, Problem 2.12E
Financial statements and closing entries
• LO2–6, LO2–7
The December 31, 2018, adjusted
| Account Title | Debits | Credits |
| Cash | 21,000 | |
| 300,000 | ||
| Prepaid rent | 10,000 | |
| Inventory | 50,000 | |
| Office equipment | 600,000 | |
| 250,000 | ||
| Accounts payable | 60,000 | |
| Note payable (due in six months) | 60,000 | |
| Salaries payable | 8,000 | |
| Interest payable | 2,000 | |
| Common stock | 400,000 | |
| 100,000 | ||
| Sales revenue | 800,000 | |
| Cost of goods sold | 480,000 | |
| Salaries expense | 120,000 | |
| Rent expense | 30,000 | |
| Depreciation expense | 60,000 | |
| Interest expense | 4,000 | |
| Advertising expense | 5,000 | |
| Totals | 1,680,000 | 1,680,000 |
Required:
1. Prepare an income statement for the year ended December 31, 2018, and a classified
2. Prepare the necessary closing entries at December 31, 2018.
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Chapter 2 Solutions
Intermediate Accounting
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