Chapter 4, Problem 4.2APR

Financial statements and closing entries

Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services pre pared an end-of-period spreadsheet, a part of which follows:

	A	F	G
1	Foxy Investigative Services
2	End-of-Period Spreadsheet
3	For the Year Ended November 30, 2018
4		Adjusted Trial Balance
6	Account Title	Dr.	Cr.
7
8	Cash	27,500
9	Accounts Receivable	71,800
10	Supplies	3,550
11	Prepaid Insurance	750
12	Building	330,500
13	Accumulated Depreciation—Building	I //	184,100
14	Accounts Payable		16,100
15	Salaries Payable		6,600
16	Unearned Rent		1,500
17	Common Stock		40,000
18	Retained Earnings		70,300
19	Dividends	30,000
20	Service Fees		675,500
21	Rent Revenue		9,000
22	Salaries Expense	435,000
23	Rent Expense	55,000
24	Supplies Expense	11,850
25	Depreciation Expense— Building	10,000
26	Utilities Expense	8,800
27	Repairs Expense	4,250
28	Insurance Expense	3,000
29	Miscellaneous Expense	11,100
30		1,003,100	1,003,100

Instructions

1. 1. Prepare an income statement, a retained earnings statement, and a balance sheet.
2. 2. Journalize the entries that were required to close the accounts at November 30.
3. 3. If Retained Earnings had instead decreased $46,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss?