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Closing
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
To Prepare:
Prepare closing entries, income statement and the classified balance sheet of Ace Construction Co. as of June 30, 2019. Prepare appropriate
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Answer to Problem 3GLP
Particulars | Amount |
Net Income | $30,890 |
Balance Sheet Total | $122,550 |
Post-Closing Trial Balance | $157,200 |
Explanation of Solution
ACE CONSTRUCTION CO. Six-Column Worksheet June 30, 2019. | |||||||
Trial Balance | Adjustments | Adjusted | |||||
No. | Account Title | Dr. | Cr. | Dr. | Cr. | Dr. | Cr. |
101 | Cash | $18,500 | $18,500 | ||||
126 | Supplies | 9,900 | $6,600 | 3,300 | |||
128 | Prepaid Insurance | 7,200 | 3,800 | 3,400 | |||
167 | Equipment | 132,000 | 132,000 | ||||
168 | $26,250 | 8,400 | $34,650 | ||||
201 | Accounts Payable | 6,800 | 650 | 7,450 | |||
203 | Interest Payable | 0 | 250 | 250 | |||
208 | Rent Payable | 0 | 500 | 500 | |||
210 | Wages Payable | 0 | 1,800 | 1,800 | |||
213 | Property taxes payable | 0 | 1,000 | 1,000 | |||
251 | Long-term notes payable | 25,000 | 25,000 | ||||
301 | V. Ace, Capital | 88,660 | 88,660 | ||||
302 | V. Ace, Withdrawals | 33,000 | 33,000 | ||||
401 | Construction fees earned | 132,100 | 132,100 | ||||
612 | Depreciation expense − Equipment | 0 | $8,400 | 8,400 | |||
623 | Wages expense | 46,860 | 1,800 | 48,660 | |||
633 | Interest expense | 2,750 | 250 | 3,000 | |||
637 | Insurance expense | 0 | 3,800 | 3,800 | |||
640 | Rent expense | 12,000 | 500 | 12,500 | |||
652 | Supplies expense | 0 | 6,600 | 6,600 | |||
683 | Property taxes expense | 7,800 | 1,000 | 8,800 | |||
684 | Repairs expense | 2,910 | 2,910 | ||||
690 | Utilities expense | 5,890 | 650 | 6,540 | |||
Totals | $278,810 | $278,810 | $23,000 | $23,000 | $291,410 | $291,410 |
Closing Entries
Date | Particulars | Debit | Credit |
2019 | |||
Dec. 31 | |||
A. | Construction fees earned | $132,100 | |
Income Summary | $132,100 | ||
B. | Income Summary | 101,210 | |
Depreciation expense − Equipment | 8,400 | ||
Wages expense | 48,660 | ||
Interest expense | 3,000 | ||
Insurance expense | 3,800 | ||
Rent expense | 12,500 | ||
Supplies expense | 6,600 | ||
Property taxes expense | 8,800 | ||
Repairs expense | 2,910 | ||
Utilities expense | 6,540 | ||
C. | Income Summary | 30,890 | |
V. Ace, Capital | 30,890 | ||
D. | V. Ace, Capital | 33,000 | |
V. Ace, Withdrawals | 33,000 | ||
ACE CONSTRUCTION CO.Income Statement
June 30, 2019 | |||||||
Revenue: | |||||||
Construction Fees Earned | $132,100 | ||||||
Expenses: | |||||||
Depreciation expense − Equipment | 8,400 | ||||||
Wages expense | 48,660 | ||||||
Interest expense | 3,000 | ||||||
Insurance expense | 3,800 | ||||||
Rent expense | 12,500 | ||||||
Supplies expense | 6,600 | ||||||
Property taxes expense | 8,800 | ||||||
Repairs expense | 2,910 | ||||||
Utilities expense | 6,540 | ||||||
Total Expense | $101,210 | ||||||
Net Income | $30,890 |
ACE CONSTRUCTION CO.Balance Sheet
June 30, 2019 | |||||||
Assets | |||||||
Current Assets: | |||||||
Cash | $18,500 | ||||||
Supplies | 3,300 | ||||||
Prepaid Insurance | 3,400 | ||||||
Total Current Assets | 25,200 | ||||||
Property, Plant and Equipment | |||||||
Equipment | 132,000 | ||||||
Less: Accumulated Depreciation | 34,650 | 97,350 | |||||
Total Assets | $122,550 | ||||||
Liabilities and Owner's Equity | |||||||
Liabilities | |||||||
Current Liabilities: | |||||||
Accounts Payable | 7,450 | ||||||
Interest Payable | 250 | ||||||
Rent Payable | 500 | ||||||
Wages Payable | 1,800 | ||||||
Property taxes payable | 1,000 | ||||||
Total Current Liabilities | 11,000 | ||||||
Long-Term Liabilities | |||||||
Long-term notes payable | 25,000 | ||||||
Total Liabilities | 36,000 | ||||||
Owner's Equity | |||||||
V. Ace, Capital; June 1 | 53,660 | ||||||
Add: Additional Capital | 35,000 | ||||||
Add: Net Income | 30,890 | ||||||
Less: Withdrawal | 33,000 | ||||||
V. Ace, Capital; June 30 | 86,550 | ||||||
Total Liabilities and Owner's Equity | $122,550 |
Post-Closing Trial Balance
ACE CONSTRUCTION CO.Post-Closing Trial Balance
June 30, 2019 | |||||||
No. | Account Title | Debit | Credit | ||||
101 | Cash | $18,500 | |||||
126 | Supplies | 3,300 | |||||
128 | Prepaid Insurance | 3,400 | |||||
167 | Equipment | 132,000 | |||||
168 | Accumulated Depreciation - Equipment | $34,650 | |||||
201 | Accounts Payable | 7,450 | |||||
203 | Interest Payable | 250 | |||||
208 | Rent Payable | 500 | |||||
210 | Wages Payable | 1,800 | |||||
213 | Property taxes payable | 1,000 | |||||
251 | Long-term notes payable | 25,000 | |||||
301 | V. Ace, Capital | $86,550 | |||||
Total | $157,200 | $157,200 |
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Connect Access Card For Fundamental Accounting Principles
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