INTERMEDIATE ACCOUNTING
3rd Edition
ISBN: 9780136946694
Author: GORDON
Publisher: RENT PEARS
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Textbook Question
Chapter 4, Problem 4.8P
Transaction Analysis; Journal
The post-closing trial balance for Heron Consulting Services, Inc. at December 31 of the prior year is presented here.
Heron Consulting Services, Inc. Post-Closing Trial Balance At December 31 (Prior Year) |
||
Account | Debit | Credit |
Cash | $1,000 | |
800 | ||
Supplies | 150 | |
Prepaid Rent | 300 | |
Building | 6,500 | |
Accounts Payable | $ 750 | |
Unearned Service Revenue | 400 | |
Common Stock | 5,000 | |
2,600 | ||
Service Revenue | 0 | |
Wage Expense | 0 | |
Utilities Expense | 0 | |
Administrative Expense | 0 | |
Totals | $8,750 | $8,750 |
The company reported the following transactions during the current year:
- January 2: Heron took out a 5%, 2-year note payable in the amount of $3,000 to pay for operating expenses. Interest is paid annually on January 1.
- February 1: Heron prepaid $600 for a one-year insurance policy. Policy begins February 1.
- March 1: Heron purchased office supplies for cash, $275.
- March 23: Heron paid $300 cash for advertising expenses.
- April 1: The existing balance of prepaid rent expired, so the company prepaid an additional $480 for a one-year lease on a warehouse.
- May 1: Heron signed a contract to perform consulting services and collected $550. Heron will not provide the services until next year.
- June 30: Heron paid wages in the amount of $200 to employees in cash.
- July 1: The company received $2,150 in cash for services rendered that day.
- August 8: Heron paid a utilities bill in the amount of $70 in cash.
- September 1: Heron paid wages in the amount of $80 in cash.
- October 1: Heron collected $250 of the accounts receivable balance.
- November 14: Heron purchased office equipment in the amount of $1,800 with cash Heron will record $50 of
depreciation on the equipment this year. - December 6: Heron received a bill for $100 for deliveries made this year and will pay the bill next year.
Note: At year-end, Heron had $100 of supplies remaining on hand Also, services pertaining to the beginning balance of unearned service revenue were performed during the year Finally, Heron reports $500 of depreciation expense related to the buildings.
Required
- a. Show the
accounting equation effect of each of the original transactions. - b. Prepare the journal entries for the original transactions Omit explanations.
- c. Prepare any necessary year-end adjusting journal entries for these transactions Show the accounting equation effect of each of the adjusting journal entries.
- d. Post all entries to the T-accounts.
- e. Prepare the adjusted trial balance at the end of the year.
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Requirement 1. Journalize Kellerman Photography's closing entries at December 31, 202
Start by closing revenues.
Date
Dec. 31
Clos. (1)
Accounts and Explanation
Depreciation Expense-Building
Depreciation Expense-Furniture
Income Summary
Kellerman, Capital
Kellerman, Withdrawals
Salaries Expense
Service Revenue
Supplies Expense
Del
The ledger of Mai Company includes the following accounts with normal balances as of December 31: Common Stock $9,000;
Dividends $800; Services Revenue $13,000; Wages Expense $8,400; and Rent Expense $1,600.
Prepare its December 31 closing entries.
View transaction list
Journal entry worksheet
Record the entry to close revenue accounts.
Note: Enter debits before credits.
General Journal
Debit
Credit
Date
Dec 31
Following are accounts and year-end adjusted balances of Cruz Company as of December 31.
Number Account Title
101
Cash
126
128
167
168
301
302
403
612
622
637
640
652
Supplies
Prepaid insurance
Equipment
Accumulated depreciation-Equipment
A. Cruz, Capital
A. Cruz, Withdrawals
Services revenue
Depreciation expense-Equipment
Salaries expense
Insurance expense
Rent expense
Supplies expense
Totals
Debit
$ 18,000
10,400
2,000
23,000
6,000
Credit
$ 6,500
43,845
40,200
2,000
23,437
1,688
2,693
1,327
$ 90,545 $ 90,545
1. Prepare the December 31 closing entries. The account number for Income Summary is 901.
2. Prepare the December 31 post-closing trial balance. Note: The A. Cruz, Capital account balance was $43,845 on December 31 of
the prior year.
Chapter 4 Solutions
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