Chapter 3, Problem 6PSB

1.

To determine

To prepare:

Ledger account, according to balance column format.

Explanation of Solution

$$Cash				Acct. No. 101
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (1)

The ending balance is $0.

Accounts Receivable				Acct. No. 106
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (2)

The ending balance is $0.

Office Supplies				Acct. No. 124
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (3)

The ending balance is $0.

Prepaid Insurance				Acct. No. 128
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (4)

The ending balance is $0.

Buildings				Acct. No. 173
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (5)

The ending balance is $0.

Accumulated depreciation Buildings				Acct. No. 174
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (6)

The ending balance is $0.

Salaries Payable				Acct. No. 209
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (7)

The ending balance is $0.

Common Stock				Acct. No. 307
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (8)

The ending balance is $0.

Retained Earnings				Acct. No. 318
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (9)

The ending balance is $0.

Dividends				Acct. No. 319
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (10)

The ending balance is $0.

Storage Fees Earned				Acct. No. 406
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (11)

The ending balance is $0.

Depreciation Expense Buildings				Acct. No. 606
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (12)

The ending balance is $0.

Salaries Expense				Acct. No. 622
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (13)

The ending balance is $0.

Insurance Expense				Acct. No. 637
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (14)

The ending balance is $0.

Rent Expense				Acct. No. 640
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (15)

The ending balance is $0.

Office Supplies Expense				Acct. No. 650
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (16)

The ending balance is $0.

Repairs Expense				Acct. No. 684
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (17)

The ending balance is $0.

Telephone expense				Acct. No. 688
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (18)

The ending balance is $0.

Income Summary				Acct. No. 901
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (19)

The ending balance is $0.

2.

To determine

To prepare:

Journal entry and post them to ledger account

Explanation of Solution

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 )

Table (20)

• Cash is an asset. Since, cash is received, it increases asset. Hence debit cash account.

• Building is an asset. Since, building is received, asset is increased. Hence, debit building accounts.

• Common stock is a liability. Since, common stock is issued, liability is increased. Hence, credit common stock account.

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))

Table (21)

• Rent Expense is an expense. Since, expense reduces equity, debit rent expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

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)

Table (22)

• Office Supplies is an asset. Since, office supplies is purchased, it increases asset. Hence, debit office supplies account.

• Cash is an asset. Since, cash is used to buy asset, cash is reduced. Hence, credit cash account.

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)

Table (23)

• Prepaid Insurance is an Asset. Since, insurance is purchased, asset is created. Hence, debit prepaid insurance account.

• Cash is an asset. Since, cash is used to buy asset, cash is reduced. Hence, credit cash account.

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)

Table (24)

• Salary Expense is an expense. Since, expense reduces equity, debit salary expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

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)

Table (25)

• Cash is an asset. Since, commission is earned and payment is received, it increases cash. Hence, debit cash account.

• Storage fees earned is a revenue account. Since, income is earned, revenue is increased. Hence, credit storage fees earned account.

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)

Table (26)

• Salary Expense is an expense. Since, expense reduces equity, debit salary expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

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)

Table (27)

• Repair Expense is an expense. Since, expense reduces equity, debit repair expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

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)

Table (28)

• Telephone Expense is an expense. Since, expense reduces equity, debit telephone expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

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)

Table (29)

• Dividend is a payment made to shareholders. Since, it reduce equity, debit dividend account.

• Cash is an asset. Since, cash is used to pay dividend, cash is reduced. Hence, credit cash account.

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

Table (30)

The ending balance is $22,850.

Accounts Receivable				Acct. No. 106
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (31)

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

Table (32)

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

Table (33)

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

Table (34)

The ending balance is $150,000.

Accumulated depreciation Buildings				Acct. No. 174
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (35)

The ending balance is $0.

Salaries Payable				Acct. No. 209
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (36)

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

Table (37)

The ending balance is $180,000.

Retained Earnings				Acct. No. 318
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (38)

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

Table (39)

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

Table (40)

The ending balance is $9,800.

Depreciation Expense Buildings				Acct. No. 606
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (41)

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

Table (42)

The ending balance is $2,000.

Insurance Expense				Acct. No. 637
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (43)

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

Table (44)

The ending balance is $2,000.

Office Supplies Expense				Acct. No. 650
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (45)

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

Table (46)

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

Table (47)

The ending balance is $400.

Income Summary				Acct. No. 901
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (48)

The ending balance is $0.

3.

To determine

To prepare:

An unadjusted trial balance.

Explanation of Solution

Prepare unadjusted trial balance as follow:

S.S. Company
Unadjusted Trial Balance
As on April 30, 2015
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

Table (49)

Thus, the total of unadjusted trial balance on 31^th July, 2015 is $189,800.

4.

To determine

To prepare:

Adjusting entry.

Explanation of Solution

a.

Date	Particulars	Post ref	Debit ($)	Credit ($)
July 31	Insurance Expense		400
	Prepaid Insurance			400
	(Being insurance coverage worth $400has expired)

Table (50)

• Insurance expense is an expense. Since, expense reduces equity, debit insurance expense account.

• Prepaid Insurance is an asset. Since, some of the insurance used up, it reduces asset. Hence, credit prepaid insurance account.

b.

Date	Particulars	Post ref	Debit ($)	Credit ($)
July 31	Office Supplies Expense		875
	Office Supply			875
	(Being $875 worth of office Supplies got exhausted)

Table (51)

• Office supplies expense is an expense. Since, expense reduces equity, debit office supplies expense account.

• Office supplies are an asset. Since, some of asset used up, it reduces asset. Hence, credit office supply account.

Working note:

Calculation of office supply expense,

$\begin{array}{c}\text{Office}\text{supply}\text{expense}=\text{Total}\text{office}\text{supply}-\text{Closing office}\text{supply}\\ =\$2,400-\$1,525\\ =\$875\end{array}$

c.

Date	Particulars	Post ref	Debit ($)	Credit ($)
July 31	Depreciation Expense		1,500
	Accumulated Depreciation-Building			1,500
	(Being depreciation is recorded)

Table (52)

• Depreciation Expense is an expense. Since, expense reduces equity, debit depreciation expense account.

• Accumulated Depreciation-Building is a Contra asset. Since, it has a normal credit balance. Hence, credit accumulated depreciation-building account.

d.

Date	Particulars	Post ref	Debit ($)	Credit ($)
July 31	Salary Expense		100
	Salary Payable			100
	(Being salaries worth $100 due to be paid)

Table (53)

• Salary expense is an expense. Since, expense reduces equity, debit salary expense account.

• Salary Payable is a liability. Since, expense has occurred but not paid yet, it increases liability. Hence, credit salary payable account.

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)

Table (54)

• Accounts Receivable is an asset. Since income is earned but received yet, it increases asset. Hence, debit accounts receivable account.

• Storage fees earned are an income. Since money is earned, income is increased. Hence, credit storage fees earned account.

Posting of adjusting 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

Table (54)

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

Table (55)

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

Table (56)

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

Table (57)

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

Table (58)

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

Table (59)

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

Table (60)

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

Table (61)

The ending balance is $180,000.

Retained Earnings				Acct. No. 318
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (62)

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

Table (63)

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

Table (64)

The ending balance is $10,950.

Depreciation Expense Buildings				Acct. No. 606
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)
July 31	Accumulated depreciation-Buildings		1,500		1,500

Table (65)

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

Table (66)

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

Table (67)

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

Table (68)

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

Table (69)

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

Table (70)

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

Table (71)

The ending balance is $400.

Income Summary				Acct. No. 901
Date	Account Title and Explanation	Post ref	Debit ($)	Credit ($)	Balance ($)

Table (72)

The ending balance is $0.

5.

To determine

To prepare:

An adjusted trial balance, income statement, statement of retained earnings and balance sheet.

Explanation of Solution

S.S. Company
Adjusted Trial Balance
As on July 31, 2015
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

Table (73)

Thus, the total of adjusted trial balance on 31^thJuly, 2017 is $192,550.

Prepare income statement.

S.S. Company
Income Statement
For month ended July 31, 2015
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

Table (74)

Thus, net income of S.S. Company is $2,725.

Prepare statement of retained earnings statement:

S.S. Company
Statement of Retained Earnings
For month ended July 31, 2015
Particulars	Amount ($)
Opening balance of retained earnings	0
Net income	2,725
	2,725
Dividends	(2,000)
Ending balance of retained earnings	725

Table (75)

Therefore, retained earnings of S.S. Company are $725.

Prepare balance sheet:

S.S. Company
Balance sheet
As on July 31, 2015
Particulars	Amount ($)	Amount ($)
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

Table (76)

Thus, the balance sheet total is $180,825.

6.

To determine

To prepare:

Closing entries.

Explanation of Solution

Transfer service revenue 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)

Table (78)

• Service revenue is revenue account. Since, revenue is transferred to income summary account, it reduces revenue. Hence, debit service revenue account.

• Income summary is a temporary account. Since, it is used for closing revenue account. Hence, credit 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)

Table (79)

• Income summary is a temporary account. Since, it is used for closing expense account. Hence, debit income summary account.

• All expenses are expenses. Since, expenses are transferred to income summary account, expenses is reduced. Hence, credit all expenses account

Balance of 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)

Table (80)

• Income summary is a temporary account. Since, it is used for transferring net income summary to retained account. Hence, debit income summary account.

• Retained earnings come under stockholder’s equity. Since, retained earning has increased. Hence, credit retained earning account.

Deduct dividend from retained earnings.

Date	Particulars	Post ref	Debit ($)	Credit ($)
July 31	Retained Earning		2,000
	Dividend			2,000
	(Being dividend distributed)

Table (81)

• Retained earnings come under stockholder’s equity. Since, retained earnings is used to pay dividend, retained earnings has decreased. Hence, debit retained earnings account.

• Dividend is distributed from profit. Since it reduces retained earnings. Hence, credit dividend account.

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

Table (82)

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

Table (83)

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

Table (84)

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

Table (85)

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

Table (86)

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

Table (87)

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

Table (88)

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

Table (89)

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

Table (90)

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

Table (91)

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

Table (92)

The ending balance is $0.

Depreciation Expense Buildings				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

Table (93)

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

Table (94)

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

Table (95)

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

Table (96)

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

Table (97)

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

Table (98)

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

Table (99)

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

Table (100)

The ending balance is $0.

7.

To determine

To prepare:

A post closing trial balance.

Explanation of Solution

Prepare adjusted trial balance as follow:

S.S. Company
Adjusted Trial Balance
As on July 31, 2015
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

Table (101)

Thus, the total of post-closing trial balance on 31^th July, 2015 is $182,325.