Chapter 5, Problem 1ACRPB

This problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting, the ultimate test is being able to handle data in real life situations. This problem will give you valuable experience.

CHART OF ACCOUNTS

You are to record transactions in a two-column general journal. Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting cycle.

When you are analyzing the transactions, think them through by visualizing the T accounts or by writing them down on scratch paper. For unfamiliar types of transactions, specific instructions for recording them are included. However, reason them out for yourself as well. Check off each transaction as it is recorded.

Required

1. 1. Journalize the transactions. (Start on page 1 of the general journal if using Excel or Working Papers.)
2. 2. Post the transactions to the ledger accounts. (Skip this step if using CLGL.)
3. 3. Prepare a trial balance. (If using a work sheet, use the first two columns.)
4. 4. Data for the adjustments are as follows:
   1. a. Insurance expired during the month, $1,000.
   2. b. Depreciation of pool structure for the month, $715.
   3. c. Depreciation of fan system for the month, $260.
   4. d. Depreciation of sailboats for the month, $900.
   5. e. Wages accrued at June 30, $810.

Your instructor may want you to use a work sheet for these adjustments.

1. 5. Journalize adjusting entries.
2. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL.)
3. 7. Prepare an adjusted trial balance
4. 8. Prepare the income statement
5. 9. Prepare the statement of owner’s equity.
6. 10. Prepare the balance sheet.
7. 11. Journalize closing entries.
8. 12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.)
9. 13. Prepare a post-dosing trial balance.

Check Figure

Trial balance total, $281,858; net income, $7,143; post-dosing trial balance total, $263,341

To determine

Prepare journal entries for the given transactions for Company WS.

Explanation of Solution

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

• Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.
• Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

Prepare journal entries for the given transactions for Company WS.

Table (1)

To determine

Post the journalized transactions in the ledger accounts of the general ledger.

Explanation of Solution

Ledger: Ledger is a book in which the accounts are summarized and grouped from the transactions recorded in the journal.

Post the journalized transactions in the ledger accounts of the general ledger.

ACCOUNT     Cash                                                                      ACCOUNT NO. 111
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	1		1	95,000		95,000
	2		1		60,000	35,000
	3		1		350	34,650
	3		1		12,000	22,650
	3		1		3,200	19,450
	3		1	150		19,600
	3		1		700	18,900
	5		2		104	18,796
	8		2	2,855		21,651
	15		2		3,900	17,751
	16		2		540	17,241
	16		2		2,500	14,711
	16		3	6,850		21,561
	19		3		40	21,521
	20		3		1,300	20,221
	22		3	8,260		28,481
	24		3		324	28,157
	29		3		4,973	23,184
	30		3		475	22,709
	30		3		345	22,364
	30		4		1,848	20,516
	30		4		590	19,926
	30		4		1,550	18,376
	30		4		1,800	16,576
	30		4	5,902		22,478

Table (2)

ACCOUNT    Accounts Receivable                                            ACCOUNT NO. 112
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30		4	28		28

Table (3)

ACCOUNT    Prepaid Insurance                                                ACCOUNT NO. 114
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1	12,000		12,000

Table (4)

ACCOUNT    Land                                                               ACCOUNT NO. 121
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	2		1	37,000		37,000

Table (5)

ACCOUNT    Pool Structure                                                  ACCOUNT NO. 125
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	2		1	140,000		140,000

Table (6)

ACCOUNT    Fan System                                                      ACCOUNT NO. 127
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	2		1	13,300		13,300
	9		1	745		14,045

Table (7)

ACCOUNT    Sailboats                                                          ACCOUNT NO. 129
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	2		1	25,800		25,800
	3		1	7,200		33,000
	16		2	850		33,850
	23		3		380	33,740
	30		4	5,320		38,790

Table (8)

ACCOUNT    Accounts Payable                                             ACCOUNT NO. 221
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1		4,000		4,000
	3		1		540		4,540
	9		2		745		5,285
	16		2	540			4,745
	16		2		850		5,595
	20		3	1,300			4,295
	23		3	380			3,915
	30		3	475			3,440
	30		4		3,770		7,210

Table (9)

ACCOUNT    Mortgage Payable                                              ACCOUNT NO. 223
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	2		1		156,100		156,100
	30		4	497			155,603

Table (10)

ACCOUNT    RC, Capital                                                       ACCOUNT NO. 311
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	1		1		95,000		95,000

Table (11)

ACCOUNT    RC, Drawing                                                      ACCOUNT NO. 312
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	16		2	2,500		2,500
	31		4	1,800		4,300

Table (12)

ACCOUNT    Income from Services                                        ACCOUNT NO. 411
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	8		2		2,855		2,855
	16		2		6,850		9,705
	22		3		8,260		17,965
	30		3		5,902		23,867

Table (13)

ACCOUNT    Concessions Income                                          ACCOUNT NO. 412
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1		150		150
	30		2		28		178

Table (14)

ACCOUNT    Sailboat Rental Expense                                  ACCOUNT NO. 511
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1	700		700

Table (15)

ACCOUNT    Wages Expense                                                 ACCOUNT NO. 512
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	15		2	3,900		3,900
	29		3	4,973		8,873

Table (16)

ACCOUNT    Advertising Expense                                         ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1	350		350
	3		1	540		890

Table (17)

ACCOUNT    Utilities Expense                                               ACCOUNT NO. 514
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	24		3	324		324
	30		3	345		669
	30		4	590		1,259

Table (18)

ACCOUNT    Interest Expense                                                ACCOUNT NO. 515
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30		3	1,351		1,351

Table (19)

ACCOUNT    Miscellaneous Expense                                     ACCOUNT NO. 522
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	5		2	104		104
	19		3	40		144

Table (20)

To determine

Prepare trial balance on the work sheet, from the account balances in Part (2).

Explanation of Solution

Worksheet: Worksheet is an accounting tool that helps accountants to record adjustments and up-date balances required to prepare financial statements. Worksheet is a central place where trial balance, adjustments, adjusted trial balance, income statement, and balance sheet are presented.

Trial balance: Trial balance is a summary of all the asset, liability, and equity accounts and their balances.

Prepare trial balance on the work sheet, from the account balances in Part (2).

Figure – (1)

To determine

Indicate the given adjustments on the worksheet for Company BO for the month ended July 31, 20--.

Explanation of Solution

Worksheet: Worksheet is an accounting tool that helps accountants to record adjustments and up-date balances required to prepare financial statements. Worksheet is a central place where trial balance, adjustments, adjusted trial balance, income statement, and balance sheet are presented.

Indicate the given adjustments on the worksheet for Company BO for the month ended July 31, 20--.

Figure-(2)

To determine

Prepare adjusting journal entries for Company WS.

Explanation of Solution

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and owners’ or stockholders’ equity) to maintain the records according to accrual basis principle and matching concept.

Prepare adjusting journal entries for Company WS.

Adjusting entry (a) for the prepaid insurance:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
June	30	Insurance Expense		516	1,000
			Prepaid Insurance	114		1,000
		(Record part of prepaid insurance expired)

Table (21)

Description:

• Insurance Expense is an expense account. Since expenses decrease equity, equity value is decreased, and a decrease in equity is debited.
• Prepaid Insurance is an asset account. Since amount of insurance is expired, asset account decreased, and a decrease in asset is credited.

Adjusting entry (b) for the depreciation expense for pool structure:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
June	30	Depreciation Expense, Pool Structure		517	715
			Accumulated Depreciation, Pool Structure	126		715
		(Record depreciation expense)

Table (22)

Description:

• Depreciation Expense, Pool Structure is an expense account. Since expenses decrease equity, equity value is decreased, and a decrease in equity is debited.
• Accumulated Depreciation, Pool Structure is a contra-asset account, and contra-asset accounts would have a normal credit balance, hence, the account is credited.

Adjusting entry (c) for the depreciation expense for fan system:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
June	30	Depreciation Expense, Fan System		518	260
			Accumulated Depreciation, Fan System	128		260
		(Record depreciation expense)

Table (23)

Description:

• Depreciation Expense, Fan System is an expense account. Since expenses decrease equity, equity value is decreased, and a decrease in equity is debited.
• Accumulated Depreciation, Fan System is a contra-asset account, and contra-asset accounts would have a normal credit balance, hence, the account is credited.

Adjusting entry (d) for the depreciation expense for sailboats:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
June	30	Depreciation Expense, Sailboats		519	900
			Accumulated Depreciation, Sailboats	130		900
		(Record depreciation expense)

Table (24)

Description:

• Depreciation Expense, Sailboats is an expense account. Since expenses decrease equity, equity value is decreased, and a decrease in equity is debited.
• Accumulated Depreciation, Sailboats is a contra-asset account, and contra-asset accounts would have a normal credit balance, hence, the account is credited.

Adjusting entry (e) for the wages expense:

Date		Account Titles and Explanation		Post Ref.	Debit ($)	Credit ($)
June	30	Wages Expense		512	810
			Wages Payable	222		810
		(Record accrued wages expenses)

Table (25)

Description:

• Wages Expense is an expense account. Since expenses decrease equity, equity value is decreased, and a decrease in equity is debited.
• Wages Payable is a liability account. Since amount of payables has increased, liability decreased, and an increase in liability is credited.

To determine

Post the adjusting entries journalized in Part (5) in the ledger accounts of general ledger.

Explanation of Solution

Post the adjusting entries journalized in Part (5) in the ledger accounts of general ledger.

ACCOUNT    Prepaid Insurance                                                       ACCOUNT NO. 114
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	2		1	12,000		12,000
	31	Adjusting			1,000	11,000

Table (26)

ACCOUNT    Accumulated Depreciation, Pool Structure                 ACCOUNT NO. 125
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting			715		715

Table (27)

ACCOUNT    Accumulated Depreciation, Fan System                      ACCOUNT NO. 128
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting			260		260

Table (28)

ACCOUNT    Accumulated Depreciation, Sailboats                           ACCOUNT NO. 130
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting			900		900

Table (29)

ACCOUNT    Wages Payable                                                             ACCOUNT NO. 222
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting			810		810

Table (30)

ACCOUNT    Wages Expense                                                 ACCOUNT NO. 512
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	15		2	3,900		3,900
	29		3	4,973		8,873
	30	Adjusting		810		9,683

Table (31)

ACCOUNT    Insurance Expense                                             ACCOUNT NO. 517
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting	2	1,000		1,000

Table (32)

ACCOUNT    Depreciation Expense, Pool Structure                         ACCOUNT NO. 517
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting		715		715

Table (33)

ACCOUNT    Depreciation Expense, Fan System                              ACCOUNT NO. 518
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting		260		260

Table (34)

ACCOUNT    Depreciation Expense, Sailboats                                  ACCOUNT NO. 519
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting		900		900

Table (35)

To determine

Prepare an adjusted trial balance for Company WS as at June 30, 20--, based on the account balances derived in Parts (2) and (6).

Explanation of Solution

Adjusted trial balance: The trial balance which reflects the adjusting entries and incorporates the effect of all adjustments in the ledger accounts, is referred to as adjusted trial balance.

Prepare an adjusted trial balance for Company WS as at June 31, 20--, based on the account balances derived in Parts (2) and (6).

Figure - (3)

To determine

Prepare an income statement of Company WS for the month ended June 30, based on the account balances derived in Parts (2) and (6).

Explanation of Solution

Income statement: The financial statement which reports revenues and expenses from business operations, and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Prepare an income statement of Company WS for the month ended June 30.

Figure - (4)

To determine

Prepare a statement of owners’ equity of Company WS, based on the account balances derived in Parts (2) and (6), and net income computed in Part (8).

Explanation of Solution

Statement of owners’ equity: This statement reports the beginning owner’s equity and all the changes which led to ending owners’ equity. Additional capital, net income from income statement is added to, and drawings are deducted from beginning owner’s equity to arrive at the end result, ending owner’s equity.

Prepare a statement of owners’ equity for Company WS for the month ended June 30.

Company WS
Statement of Owners’ Equity
For the Month Ended June 30, 20--
RC, Capital, June 1, 20--		$0
Investments during June	$95,000
Net income for June	7,143
	102,143
Less: Withdrawals for June	4,300
Increase in capital		97,893
RC, Capital, June 30, 20--		$97,843

Table (36)

To determine

Prepare a balance sheet for Company WS, based on the account balances derived in Parts (2) and (6), and capital of the owner from the statement of owners’ equity prepared in Part (9).

Explanation of Solution

Balance sheet: This financial statement reports a company’s resources (assets) and claims of creditors (liabilities) and owners (owners’ equity) over those resources. The resources of the company are assets which include money contributed by owners and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and owners’ equity.

Prepare the balance sheet for Company WS as at June 30, 20--.

Table (37)

To determine

Prepare closing entries numbering the entries 1 through 4.

Explanation of Solution

Closing entries: The journal entries prepared to close the temporary accounts to capital account are referred to as closing entries. The revenue, expense, and drawing accounts are referred to as temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to permanent account at the end of accounting year.

Steps in closing procedure:

1. 1. Close the revenue accounts to Income Summary account.
2. 2. Close the expense accounts to Income Summary account.
3. 3. Close the Income Summary account and transfer the net income or net loss balance to the Capital account.
4. 4. Close the Drawing account to Capital account.

Prepare closing entries numbering the entries 1 through 4.

Entry 1:

Date		Account Titles and Explanations		Post. Ref.	Debit ($)	Credit ($)
June	30	Income from Services		411	23,867
		Concessions Income		412	178
			Income Summary	313		24,045
		(Record closing of revenue to Income Summary account)

Table (38)

Description:

• Income from Services and Concessions Income are revenue accounts. Revenue account has a normal credit balance. Since revenue is closed to Income Summary account, the account is debited.
• Income Summary is a clearing account which closes revenue, expense, drawings, and net of revenues and expenses to capital accounts. The account is credited to hold the transferred balance from revenue account.

Entry 2:

Date		Account Titles and Explanations		Post. Ref.	Debit ($)	Credit ($)
June	30	Income Summary		313	16,902
			Sailboat Rental Expense	511		700
			Wages Expense	512		9,683
			Advertising Expense	513		890
			Utilities Expense	514		1,259
			Interest Expense	515		1,351
			Insurance Expense	516		1,000
			Depreciation Expense, Pool Structure	517		715
			Depreciation Expense, Fan System	518		260
			Depreciation Expense, Sailboats	519		900
			Miscellaneous Expense	522		144
		(Record closing of expenses to Income Summary account)

Table (39)

Description:

• Income Summary is a clearing account which closes revenue, expense, drawings, and net of revenues and expenses to capital accounts. The account is debited to hold the transferred balance from expense accounts.
• All expense accounts have a normal debit balance. Since expenses are closed to Income Summary account, the accounts are credited.

Entry 3:

Date		Account Titles and Explanations		Post. Ref.	Debit ($)	Credit ($)
June	30	Income Summary		313	7,143
			RC, Capital	311		7,143
		(Record closing of net income to capital account)

Table (40)

Description:

• Income Summary is a clearing account which closes revenue, expense, drawings, and net of revenues and expenses to capital accounts. Since net income is closed, the account is reversed, hence, the Income Summary account is debited.
• RC, Capital is a capital account. Since net income is transferred to the account, the value increased, and an increase in capital is credited.

Entry 4:

Date		Account Titles and Explanations		Post. Ref.	Debit ($)	Credit ($)
June	30	RC, Capital		311	4,300
			RC, Drawing	312		4,300
		(Record closing of drawing to capital account)

Table (41)

Description:

• RC, Capital is a capital account. Since drawings is transferred to the account, the value decreased, and a decrease in capital is debited.
• RC, Drawing is a capital account. Since drawings is transferred, the account is credited to reverse the previously debited effect.

To determine

Post the closing entries to ledger accounts.

Explanation of Solution

Post the closing entries to ledger accounts.

ACCOUNT    RC, Capital                                                       ACCOUNT NO. 311
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	1		1		95,000		95,000
	30	Closing			7,143		102,143
	30	Closing		4,300			97,843

Table (42)

ACCOUNT    RC, Drawing                                                      ACCOUNT NO. 312
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	16		2	2,500		2,500
	30		4	1,800		4,300
	30	Closing			4,300	0

Table (43)

ACCOUNT    Income from Services                                        ACCOUNT NO. 411
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	8		2		2,855		2,855
	16		2		6,850		9,705
	22		3		8,260		17,965
	30		3		5,902		23,867
	30	Closing		23,867			0

Table (44)

ACCOUNT    Concessions Income                                          ACCOUNT NO. 412
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		2		150		150
	30		2		28		178
	30	Closing		178			0

Table (45)

ACCOUNT    Sailboat Rental Expense                                   ACCOUNT NO. 511
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1	700		700
	30	Closing			700	0

Table (46)

ACCOUNT    Wages Expense                                                 ACCOUNT NO. 512
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	15		2	3,900		3,900
	29		3	4,973		8,873
	30	Adjusting	4	810		9,683
	30	Closing	5		9,683	0

Table (47)

ACCOUNT    Advertising Expense                                         ACCOUNT NO. 513
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	3		1	350		350
	3		1	540		890
	30	Closing			890	0

Table (48)

ACCOUNT    Utilities Expense                                               ACCOUNT NO. 514
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	24		3	324		324
	30		3	345		669
	30		4	590		1,259
	30	Closing			1,259	0

Table (49)

ACCOUNT    Interest Expense                                                ACCOUNT NO. 515
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30		4	1,351		1,351
	30	Closing			1,351	0

Table (50)

ACCOUNT    Miscellaneous Expense                                     ACCOUNT NO. 522
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	5		2	104		104
	19		3	40		144
	30	Closing			144	0

Table (51)

ACCOUNT    Insurance Expense                                             ACCOUNT NO. 517
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting	4	1,000		1,000
	30	Closing	5		1,000	0

Table (52)

ACCOUNT    Depreciation Expense, Pool Structure                         ACCOUNT NO. 517
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting		715		715
	30	Closing			715	0

Table (53)

ACCOUNT    Depreciation Expense, Fan System                              ACCOUNT NO. 519
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting		260		260
	30	Closing			260	0

Table (54)

ACCOUNT    Depreciation Expense, Sailboats                                ACCOUNT NO. 519
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Adjusting		900		900
	30	Closing			900	0

Table (55)

ACCOUNT    Income Summary                                                         ACCOUNT NO. 313
Date		Item	Post. Ref.	Debit ($)	Credit ($)	Balance
						Debit ($)	Credit ($)
June	30	Closing			24,045		24,045
	30	Closing		16,902			7,143
	30	Closing		7,143			0

Table (56)

To determine

Prepare a post-closing trial balance for Company WS as at June 30, 20--.

Explanation of Solution

Post-closing trial balance: Post-closing trial balance is a summary of all the asset, liability, and capital accounts and their balances, after the closing entries are prepared. So, post-closing trial balance reports the balances of permanent accounts only.

Prepare a post-closing trial balance for Company WS as at June 30, 20--.

Company WS
Post-Closing Trial Balance
July 31, 20--
Account Names	Debit ($)	Credit ($)
Cash	$22,478
Accounts Receivables	28
Prepaid Insurance	11,000
Land	37,000
Pool Structure	140,000
Accumulated Depreciation, Pool Structure		$715
Fan System	14,045
Accumulated Depreciation, Fan System		260
Sailboats	38,790
Accumulated Depreciation, Sailboats		900
Accounts Payable		7,210
Wages Payable		810
Mortgage Payable		155,603
RC, Capital		97,843
	$263,341	$263,341

Table (57)