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Chapter 4: Q1PS (page 243)

Question:Refer to the Practice Set data provided in Chapters 2 and 3 for Crystal Clear Cleaning.

Requirements

1. Prepare a worksheet (optional) at November 30, 2018. Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.

2. Prepare an income statement and statement of retained earnings for the month ended November 30, 2018. Also prepare a classified balance sheet at November 30, 2018, using the report format. Assume the Notes Payable is long-term. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.

3. Prepare closing entries at November 30, 2018, and post to the accounts. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance in each account. Denote each closing amount as Clos. and each account balance as Balance.

4. Prepare a post-closing trial balance at November 30, 2018.

Short Answer

Expert verified

Answer

Post-Closing Trial Balance: $72,900

Step by step solution

01

Worksheet

Crystal Clear Company
Worksheet
November 30, 2018








Account Names		Unadjusted Trial Balance
Adjustments
Adjusted Trial Balance
Debit
CreditDebit
creditDebit

Cash

$ 51,650

$ 51,650

Accounts Receivables

4,000

4,000

Cleaning Supplies

320

$ 270

50

Prepaid Rent

4,000

4,000

Prepaid Insurance

4,800

4,800

Equipment

5,400

5,400

Truck

3,000

3,000

Accounts Payable

$ 1,245

$ 1,245

Unearned Revenue

15,000

15,000

Notes Payable

36,000

36,000

Common Stock

18,000

18,000

Dividends

1,400

1,400

Service Revenue

5,100

5,100

Salaries Expense

400

400

Advertising Expense

200

200

Utilities Expense

175

175

Supplies Expense

$ 270

270

Depreciation Expense

150

150

Accumulated Depreciation

150

150

Interest Expense

59

59

Accrued Interest

59

59

Total

$ 75,345

$ 75,345

$ 479

$ 479

$ 75,554

$ 75,554

02

Income statement, statement of retained earnings and balance sheet

Income Statement
Canyon Canoe Company

Amount

Particular

Service Revenue

5,100

Salaries Expense

400

Advertising Expense

200

Utilities Expense

175

Supplies Expense

270

Depreciation Expense

150

Interest Expense

59

Total Expenses

1,254

Net Income

$ 3,846


Retained Earnings Statement

Particular

Amount

Beginning Balance

0

Add: Net Income

$ 3,846

Less: Dividends

1,400

Ending Balance

$ 2,446

Balance Sheet
December 31, 2018

Assets

Amount

Current Assets

Cash

$ 51,650

Accounts Receivables

4,000

Cleaning Supplies

50

Prepaid Rent

4,000

Prepaid Insurance

4,800

Total Current Assets

$ 64,500

Non-current Assets

Equipment

5,400

Truck

3,000

Less: Accumulated Depreciation

150

8,250

Total Non-Current Assets

$ 8,250

Total Assets

$ 72,750

Liabilities and Shareholder’s equity

Current Liability

Accounts Payable

1,245

Unearned Revenue

15,000

Accrued Interest

59

Total Current Liability

$ 16,304

Non-Current Liability

Notes Payable

36,000

Total Non-Current Liability

36,000

Total Liability

52,304

Shareholders’ Equity

Wilson, Capital

$ 18,000

Add: Retained Earnings

2,446

Total Shareholders’ Equity

$ 20,446

Total Liabilities and Shareholders’ Equity

$ 72,750

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Most popular questions from this chapter

For each account listed, identify the category in which it would appear on a classified balance sheet.

3. Land

For each account listed, identify whether the account is a temporary account (T) or a permanent account (P). a. Rent Expense b. Prepaid Rent c. Equipment d. Common Stock e. Salaries Payable f. Dividends g. Service Revenue h. Supplies Expense i. Office Supplies.

Benson Auto Repair had the following account balances after adjustments. Assume all accounts had normal balances.

Cash \( 4,000 Common Stock \) 20,000

Accounts Receivable 3,200 Retained Earnings, January 1 15,700

Prepaid Rent 1,900 Dividends 2,100

Office Supplies 3,000 Service Revenue 1,600

Equipment 34,800 Depreciation Expense—Equipment 300

Accumulated Depreciation—Equipment 1,600 Salaries Expense 800

Accounts Payable 5,400 Rent Expense 500

Notes Payable (long-term) 7,000 Utilities Expense 600

Supplies Expense 100

14. Prepare the closing entries for Benson at December 31.

15. What is the balance of Retained Earnings after closing entries have been recorded? (Use a T-account to determine the balance.)

How is the Income Summary account used? Is it a temporary or permanent account?

The unadjusted trial balance and adjustment data of Myla’s Motors at December 31, 2018, follow: Adjustment data at December 31, 2018: a. Depreciation on equipment, \(1,700. b. Accrued Wages Expense, \)1,300. c. Office Supplies on hand, \(400. d. Prepaid Insurance expired during December, \)250. Learning Objective 7 Appendix 4A Account Title Office Supplies Cash Debit Credit Accounts Receivable Prepaid Insurance Equiment Accumulated Depreciation—Equipment Accounts Payable Wages Payable Unearned Revenue Dividends Common Stock Service Revenue Depreciation Expense—Equipment Wages Expense Insurance Expense Utilities Expense Supplies Expense Total Balance \( 4,500 \) 90,900 5,700 4,300 19,300 17,200 26,100 1,000 1,500 \( 35,000 13,700 50,500 1,200 1,800 MYLA’S MOTORS Unadjusted Trial Balance December 31, 2018 \) 90, e. Unearned Revenue earned during December, \(4,200. f. Accrued Service Revenue, \)1,000. 2019 transactions: a. On January 4, Myla’s Motors paid wages of \(1,900. Of this, \)1,300 related to the accrued wages recorded on December 31. b. On January 10, Myla’s Motors received \(1,700 for Service Revenue. Of this, \)1,000 related to the accrued Service Revenue recorded on December 31. Requirements 1. Journalize adjusting entries. 2. Journalize reversing entries for the appropriate adjusting entries. 3. Refer to the 2019 data. Journalize the cash payment and the cash receipt that occurred in 2019.
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