
Concept explainers
1.
To prepare: Ledger account, according to balance column format.
1.

Explanation of Solution
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Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Office Supplies Acct. No. 124 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Prepaid Insurance Acct. No. 128 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Buildings Acct. No. 173 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Salaries Payable Acct. No. 209 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Common Stock Acct. No. 307 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Dividends Acct. No. 319 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Storage Fees Earned Acct. No. 406 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Depreciation ExpenseBuildings Acct. No. 606 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Salaries Expense Acct. No. 622 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Insurance Expense Acct. No. 637 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Rent Expense Acct. No. 640 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Office Supplies Expense Acct. No. 650 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Repairs Expense Acct. No. 684 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Telephone expense Acct. No. 688 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Income Summary Acct. No. 901 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
2.
To prepare: Journal
2.

Explanation of Solution
Prepare journal entries.
Common Stock issued in exchange for Cash and Computer Equipment.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 1 | Cash | 30,000 | ||
Buildings | 150,000 | |||
Common Stock | 180,000 | |||
(Being common stock issued in exchange for cash and building ) |
Rent paid for one month worth $2,000.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 2 | Rent Expense | 2,000 | ||
Cash | 2,000 | |||
(Being rent paid for the first month)) |
Office Supplies Worth $2,400 purchased for cash.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 3 | Office Supplies | 2,400 | ||
Cash | 2,400 | |||
(Being Office supplies worth $2,400 purchased) |
Insurance purchased worth$7,200 for cash.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 10 | Prepaid Insurance | 7,200 | ||
Cash | 7,200 | |||
(Being Insurance purchased) |
Salary Expense worth $1,000 paid for two weeks of work.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 14 | Salary Expense | 1,000 | ||
Cash | 1,000 | |||
(Being Salary paid for two weeks of work) |
Storage fees worth of $9,800 is received from customers.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 24 | Cash | 9,800 | ||
Storage fees earned | 9,800 | |||
(Being storage fees received from customers) |
Salary Expense worth $1,000 paid for two weeks of work.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 28 | Salary Expense | 1,000 | ||
Cash | 1,000 | |||
(Being Salary paid for two weeks of work) |
Cash worth $950 used for repairs of company’ computer.
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 29 | Repair Expense | 950 | ||
Cash | 950 | |||
(Being cash spend on repairs) |
Telephone expenses paid by company worth $400
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 30 | Telephone Expense | 400 | ||
Cash | 400 | |||
(Being telephone expenses paid) |
Dividend paid by company worth $2,000
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) |
July 31 | Dividends | 2,000 | ||
Cash | 2,000 | |||
(Being dividend paid by company) |
Posting of journal entries to ledger account:
Cash Acct. No. 101 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Common Stock | 30,000 | 30,000 | ||
July 2 | Rent Expenses | 2,000 | 28,000 | ||
July 3 | Office supplies | 2,400 | 25,600 | ||
July 10 | Prepaid Insurance | 7,200 | 18,400 | ||
July 14 | Salary Expense | 1,000 | 17,400 | ||
July 24 | Storage fees earned | 9,800 | 27,200 | ||
July 28 | Salary Expense | 1,000 | 26,200 | ||
July 29 | Repair Expense | 950 | 25,250 | ||
July 30 | Telephone Expense | 400 | 24,850 | ||
July 31 | Dividend | 2,000 | 22,850 |
The ending balance is $22,850.
Accounts Receivable Acct. No. 106 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Office Supplies Acct. No. 124 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 3 | Cash | 2,400 | 2,400 |
The ending balance is $2,400.
Prepaid Insurance Acct. No. 128 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 10 | Cash | 7,200 | 7,200 |
The ending balance is $7,200.
Buildings Acct. No. 173 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Common stock | 150,000 | 150,000 |
The ending balance is $150,000.
Accumulated | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Salaries Payable Acct. No. 209 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Common Stock Acct. No. 307 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Cash | 30,000 | 30,000 | ||
July 1 | Buildings | 150,000 | 180,000 |
The ending balance is $180,000.
Retained Earnings Acct. No. 318 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Dividends Acct. No. 319 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Cash | 2,000 | 2,000 |
The ending balance is $2,000.
Storage Fees Earned Acct. No. 406 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 24 | Cash | 9,800 | 9,800 |
The ending balance is $9,800.
Depreciation ExpenseBuildings Acct. No. 606 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Salaries Expense Acct. No. 622 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 14 | Cash | 1,000 | 1,000 | ||
July 28 | Cash | 1,000 | 2,000 |
The ending balance is $2,000.
Insurance Expense Acct. No. 637 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Rent Expense Acct. No. 640 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 2 | Cash | 2,000 | 2,000 |
The ending balance is $2,000.
Office Supplies Expense Acct. No. 650 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Repairs Expense Acct. No. 684 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 29 | Cash | 950 | 950 |
The ending balance is $950.
Telephone expense Acct. No. 688 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 30 | Cash | 400 | 400 |
The ending balance is $400.
Income Summary Acct. No. 901 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
3.
To prepare: An unadjusted
3.

Explanation of Solution
S.S. Company | ||
Unadjusted Trial Balance | ||
As on April 30, 2017 | ||
Particulars | Debit($) | Credit($) |
Cash | 22,850 | |
Accounts Receivable | 0 | |
Office Supplies | 2,400 | |
Prepaid Insurance | 7,200 | |
Building | 150,000 | |
Accumulated Depreciation-Building | 0 | |
Salaries Payable | 0 | |
Common Stock | 180,000 | |
Retained earnings | 0 | |
Dividends | 2,000 | |
Storage fees earned | 9,800 | |
Depreciation Expense-Building | 0 | |
Salaries Expenses | 2,000 | |
Rent Expenses | 2,000 | |
Office Supply Expense | 0 | |
Repairs Expenses | 950 | |
Telephone Expense | 400 | |
Insurance Expense | 0 | |
Income Summary | 0 | |
Total | 189,800 | 189,800 |
Thus, the total of unadjusted trial balance on 31th July, 2017 is $189,800.
4.
To prepare: Adjusting entry.
4.

Explanation of Solution
a.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Insurance Expense | 400 | ||
Prepaid Insurance | 400 | |||
(Being insurance coverage worth $400has expired) |
b.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Office Supplies Expense | 875 | ||
Office Supply | 875 | |||
(Being $875 worth of office Supplies got exhausted) |
Working note:
Calculation of office supply expense,
c.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Depreciation Expense | 1,500 | ||
Accumulated Depreciation-Building | 1,500 | |||
(Being depreciation is recorded) |
d.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Salary Expense | 100 | ||
Salary Payable | 100 | |||
(Being salaries worth $100 due to be paid) |
e.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Accounts Receivable | 1,150 | ||
Storage fees earned | 1,150 | |||
(Being storage fees earned but not received yet) |
Posting of
Cash Acct. No. 101 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Common Stock | 30,000 | 30,000 | ||
July 2 | Rent Expenses | 2,000 | 28,000 | ||
July 3 | Office supplies | 2,400 | 25,600 | ||
July 10 | Prepaid Insurance | 7,200 | 18,400 | ||
July 14 | Salary Expense | 1,000 | 17,400 | ||
July 24 | Storage fees earned | 9,800 | 27,200 | ||
July 28 | Salary Expense | 1,000 | 26,200 | ||
July 29 | Repair Expense | 950 | 25,250 | ||
July 30 | Telephone Expense | 400 | 24,850 | ||
July 31 | Dividend | 2,000 | 22,850 |
The ending balance is $22,850.
Accounts Receivable Acct. No. 106 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Storage fees earned | 1,150 | 1,150 |
The ending balance is $1,150.
Office Supplies Acct. No. 124 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 3 | Cash | 2,400 | 2,400 | ||
July 31 | Office supplies expense | 875 | 1,525 |
The ending balance is $1,525.
Prepaid Insurance Acct. No. 128 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 10 | Cash | 7,200 | 7,200 | ||
July 31 | Insurance expense | 400 | 6,800 |
The ending balance is $6,800.
Buildings Acct. No. 173 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Common stock | 150,000 | 150,000 |
The ending balance is $150,000.
Accumulated depreciation Buildings Acct. No. 174 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Depreciation expense | 1,500 | 1,500 |
The ending balance is $1,500.
Salaries Payable Acct. No. 209 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Salary expense | 100 | 100 |
The ending balance is $100.
Common Stock Acct. No. 307 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Cash | 30,000 | 30,000 | ||
July 1 | Buildings | 150,000 | 180,000 |
The ending balance is $180,000.
Retained Earnings Acct. No. 318 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
Dividends Acct. No. 319 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Cash | 2,000 | 2,000 |
The ending balance is $2,000.
Storage Fees Earned Acct. No. 406 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 24 | Cash | 9,800 | 9,800 | ||
July 31 | Accounts receivable | 1,150 | 10,950 |
The ending balance is $10,950.
Depreciation ExpenseBuildings Acct. No. 606 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Accumulated depreciation-Buildings | 1,500 | 1,500 |
The ending balance is $1,500.
Salaries Expense Acct. No. 622 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 14 | Cash | 1,000 | 1,000 | ||
July 28 | Cash | 1,000 | 2,000 | ||
July 31 | Salaries payable | 100 | 2,100 |
The ending balance is $2,100.
Insurance Expense Acct. No. 637 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Prepaid insurance | 400 | 400 |
The ending balance is $400.
Rent Expense Acct. No. 640 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 2 | Cash | 2,000 | 2,000 |
The ending balance is $2,000.
Office Supplies Expense Acct. No. 650 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Office supplies | 875 | 875 |
The ending balance is $875.
Repairs Expense Acct. No. 684 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 29 | Cash | 950 | 950 |
The ending balance is $950.
Telephone expense Acct. No. 688 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 30 | Cash | 400 | 400 |
The ending balance is $400.
Income Summary Acct. No. 901 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
The ending balance is $0.
5.
To prepare: An adjusted trial balance, income statement, statement of retained earnings and
5.

Explanation of Solution
S.S. Company | ||
Adjusted Trial Balance | ||
For month ended July 31, 2017 | ||
Particulars | Debit($) | Credit($) |
Cash | 22,850 | |
Accounts Receivable | 1,150 | |
Office Supplies | 1,525 | |
Prepaid Insurance | 6,800 | |
Buildings | 150,000 | |
Accumulated Depreciation-Buildings | 1,500 | |
Salaries Payable | 100 | |
Common Stock | 180,000 | |
Retained earnings | 0 | |
Dividends | 2,000 | |
Storage fees Earned | 10,950 | |
Depreciation Expense-Buildings | 1,500 | |
Salaries Expenses | 2,100 | |
Rent Expenses | 2,000 | |
Office Supply Expense | 875 | |
Repairs Expenses | 950 | |
Telephone Expense | 400 | |
Insurance Expense | 400 | |
Income Summary | 0 | |
Total | 192,550 | 192,550 |
Thus, the total of adjusted trial balance on 31thJuly, 2017 is $192,550.
Prepare Income Statement.
S.S. Company | ||
Income Statement | ||
For month ended July 31, 2017 | ||
Particulars | Amount($) | Amount($) |
Revenue: | ||
Service Revenue | 10,950 | |
Total Revenue | 10,950 | |
Expenses: | ||
Depreciation Expense-Buildings | 1,500 | |
Salaries Expenses | 2,100 | |
Rent Expenses | 2,000 | |
Office Supply Expense | 875 | |
Repairs Expenses | 950 | |
Telephone Expense | 400 | |
Insurance Expense | 400 | |
Total Expense | 8,225 | |
Net income | 2,725 |
Thus, net income of S.S. Company is $2,725.
Prepare Retained Earnings Statement:
S.S. Company | |
Retained Earnings Statement | |
For month ended July 31, 2017 | |
Particulars | Amount($) |
Opening balance | 0 |
Net income | 2,725 |
Dividends | (2,000) |
Retained earnings | 725 |
Therefore, retained earnings of S.S. Company are $725.
Prepare balance sheet.
S.S. Company | ||
Balance sheet | ||
As on July 31, 2017 | ||
Particulars | Amount($) | |
Assets | ||
Cash | 22,850 | |
Office Supplies | 1,525 | |
Account Receivables | 1,150 | |
Prepaid Insurance | 6,800 | |
Buildings | 150,000 | |
Less: Accumulated depreciation | (1,500) | 148,500 |
Total Assets | 180,825 | |
Liabilities and Stockholder’s Equity | ||
Liabilities | ||
Salaries Payable | 100 | |
Stockholder’s Equity | ||
Common Stock | 180,000 | |
Retained earnings | 725 | |
Total stockholders’ equity | 180,725 | |
Total Liabilities and Stockholder’s equity | 180,825 |
Thus, the balance sheet total is $180,825.
6.
To prepare: Closing entries.
6.

Explanation of Solution
Service revenue transfer to income summary account for closing.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Service Revenue | 10,950 | ||
Income Summary | 10,950 | |||
(Being service revenue transfer to income summary account) |
All expenses transfer to income summary account for closing.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Income summary | 8,225 | ||
Depreciation Expense-Buildings | 1,500 | |||
Salaries Expenses | 2,100 | |||
Rent Expenses | 2,000 | |||
Office Supply Expense | 875 | |||
Repairs Expenses | 950 | |||
Telephone Expense | 400 | |||
Insurance Expense | 400 | |||
(Being all expenses transfer to income summary account) |
Income Summary transfer to income summary account for closing.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Income Summary | 2,725 | ||
Retained Earning | 2,725 | |||
(Being net income transfer to retained earnings) |
Deduct dividend from retained earnings.
Date | Particulars | Post ref | Debit($) | Credit($) |
July 31 | Retained Earning | 2,000 | ||
Dividend | 2,000 | |||
(Being dividend distributed) |
Posting of closing entries into ledger account.
Cash Acct. No. 101 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Common stock | 30,000 | 30,000 | ||
July 2 | Rent expenses | 2,000 | 28,000 | ||
July 3 | Office supplies | 2,400 | 25,600 | ||
July 10 | Prepaid insurance | 7,200 | 18,400 | ||
July 14 | Salary expense | 1,000 | 17,400 | ||
July 24 | Storage fees earned | 9,800 | 27,200 | ||
July 28 | Salary expense | 1,000 | 26,200 | ||
July 29 | Repair expense | 950 | 25,250 | ||
July 30 | Telephone expense | 400 | 24,850 | ||
July 31 | Dividend | 2,000 | 22,850 |
The ending balance is $22,850.
Accounts Receivable Acct. No. 106 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Storage fees earned | 1,150 | 1,150 |
The ending balance is $1,150.
Office Supplies Acct. No. 124 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 3 | Cash | 2,400 | 2,400 | ||
July 31 | Office supplies expense | 875 | 1525 |
The ending balance is $1,525.
Prepaid Insurance Acct. No. 128 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 10 | Cash | 7,200 | 7,200 | ||
July 31 | Insurance expense | 400 | 6,800 |
The ending balance is $6,800.
Buildings Acct. No. 173 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Common stock | 150,000 | 150,000 |
The ending balance is $150,000.
Accumulated depreciation Buildings Acct. No. 174 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Depreciation expense | 1,500 | 1,500 |
The ending balance is $1,500.
Salaries Payable Acct. No. 209 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Salary expense | 100 | 100 |
The ending balance is $100.
Common Stock Acct. No. 307 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 1 | Cash | 30,000 | 30,000 | ||
July 1 | Buildings | 150,000 | 180,000 |
The ending balance is $180,000.
Retained Earnings Acct. No. 318 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Income summary | 2,725 | |||
July 31 | Dividend | 2,000 | 725 |
The ending balance is $0.
Dividends Acct. No. 319 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Cash | 2,000 | 2,000 | ||
July 31 | Retained earnings | 2,000 | 0 |
The ending balance is $0.
Storage Fees Earned Acct. No. 406 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 24 | Cash | 9,800 | 9,800 | ||
July 31 | Accounts receivable | 1,150 | 10,950 | ||
July 31 | Income summary | 10,950 | 0 |
The ending balance is $0.
Depreciation ExpenseBuildings Acct. No. 606 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Accumulated depreciation- Buildings | 1,500 | 1,500 | ||
July 31 | Income summary | 1,500 | 0 |
The ending balance is $0.
Salaries Expense Acct. No. 622 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 14 | Cash | 1,000 | 1,000 | ||
July 28 | Cash | 1,000 | 2,000 | ||
July 31 | Salaries payable | 100 | 2,100 | ||
July 31 | Income summary | 2,100 | 0 |
The ending balance is $0.
Insurance Expense Acct. No. 637 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Prepaid insurance | 400 | 400 | ||
July 31 | Income summary | 400 | 0 |
The ending balance is $0.
Rent Expense Acct. No. 640 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 2 | Cash | 2,000 | 2,000 | ||
July 31 | Income summary | 2,000 | 0 |
The ending balance is $0.
Office Supplies Expense Acct. No. 650 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Office supplies | 875 | 875 | ||
July 31 | Income summary | 875 | 0 |
The ending balance is $0.
Repairs Expense Acct. No. 684 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 29 | Cash | 950 | 950 | ||
July 31 | Income summary | 950 | 0 |
The ending balance is $0.
Telephone expense Acct. No. 688 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 30 | Cash | 400 | 400 | ||
July 31 | Income summary | 400 | 0 |
The ending balance is $0.
Income Summary Acct. No. 901 | |||||
Date | Account Title and Explanation | Post ref | Debit($) | Credit($) | Balance($) |
July 31 | Service Revenue | 10,950 | 10,950 | ||
July 31 | Depreciation Expense-Buildings | 1,500 | 9,450 | ||
July 31 | Salaries Expenses | 2,100 | 7,350 | ||
July 31 | Rent Expenses | 2,000 | 5,350 | ||
July 31 | Office Supply Expense | 875 | 4,475 | ||
July 31 | Repairs Expenses | 950 | 3,525 | ||
July 31 | Telephone Expense | 400 | 3,125 | ||
July 31 | Insurance Expense | 400 | 2,725 | ||
July 31 | Retained earnings | 2,725 | 0 |
The ending balance is $0.
7.
To prepare: A post closing trial balance.
7.

Explanation of Solution
S.S. Company | ||
Adjusted Trial Balance | ||
For month ended July 31, 2017 | ||
Particulars | Debit($) | Credit($) |
Cash | 22,850 | |
Accounts Receivable | 1,150 | |
Office Supplies | 1,525 | |
Prepaid Insurance | 6,800 | |
Buildings | 150,000 | |
Accumulated Depreciation-Buildings | 1,500 | |
Salaries Payable | 100 | |
Common Stock | 180,000 | |
Retained earnings | 725 | |
Dividends | 0 | |
Storage fees Earned | 0 | |
Depreciation Expense-Buildings | 0 | |
Salaries Expenses | 0 | |
Rent Expenses | 0 | |
Office Supply Expense | 0 | |
Repairs Expenses | 0 | |
Telephone Expense | 0 | |
Insurance Expense | 0 | |
Income Summary | 0 | 0 |
Total | 182,325 | 182,325 |
Thus, the total of post-closing trial balance on 31th July, 2017 is $182,325.
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Chapter 3 Solutions
FINANCIAL & MANAGERIAL ACCOUNTING
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