Chapter 4, Problem 2GLP

To determine

Adjusted Trial Balance:

Considering all the expenses and revenue occurred irrespective of whether cash is outstanding or received in advance during an accounting period, the adjusted trial balance shows the accurate balances of all the accounts.

Closing Entries:

Closing entries intends to close all the temporary accounts and transfer its balances to "income summary account" and then to the owner's capital account. The accounts which are closed at the end of every accounting period are called temporary accounts. Examples: revenue accounts and expenses accounts like salaries, rent, depreciation, insurance, commission expenses, etc.

Income Statement:

The financial statement concerned with computation net income during an accounting period is called income statement. Net income is the excess amount of revenue over the expenses of a company and when the expenses are more than the revenue is termed as net loss.

Classified Balance Sheet:

A classified balance sheet interprets the financial position of a business during particular period under different categories i.e. current assets, current liabilities, non-current assets, long-term liabilities, property, plant and equipment and owner's equity.

To Prepare:

Prepare closing entries, income statement and the classified balance sheet of Ace Construction Co. as of April 30, 2019. Prepare appropriate trial balance according to the information available.