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Chapter 4: Q26E (page 228)

Houston Veterinary Hospital completed the following worksheet as of December 31, 2018.


Requirements

1. Complete the worksheet for Houston Veterinary Hospital.

2. Prepare the closing entries.

3. Prepare a post-closing trial balance.

Short Answer

Expert verified

(1) Worksheet is mentioned in Step 1.

(2) Closing entries are mentioned in Step 2.

(3) Post-closing trial balance is mentioned in Step 3.

Step by step solution

01

Worksheet

(1) Worksheet is shown as follows:

02

Closing entries

(2) Closing entries are as follows:

Date

Accounts and Explanation

Debit

Credit

Dec. 31

Service Revenue

$37,700

Income Summary

$37,700

To close revenue.

Dec. 31

Income Summary

$49,850

Salaries Expense

$13,075

Rent Expense

$23,600

Depreciation Expense—Equipment

$1,900

Supplies Expense

$275

Utilities Expense

$11,000

To close expenses.

Dec. 31

Retained Earnings

$12,150

Income Summary

$12,150

To close Income Summary

Dec. 31

Retained Earnings

$28,000

Dividends

$28,000

To close Dividends

03

Post-closing trial balance

(3) Post-closing trial balance is shown as follows:

HOUSTON VETERINARY HOSPITAL

Post-Closing Trial Balance

December 31, 2018

Balance

Account Title

Debit

Credit

Cash

$31,200

Accounts Receivable

10,100

Office Supplies

1,225

Prepaid Rent

5,400

Equipment

27,000

Accumulated Depreciation—Equipment

1,900

Accounts Payable

3,400

Utilities Payable

310

Salaries Payable

1,075

Unearned Revenue

11,700

Common Stock

41,000

Retained Earnings

15,540

Total

$74,925

$74,925

04

Calculation of ending balance of retained earnings

Ending balance of retained earnings is calculated as follows:

EndingBalance=BeginningBalance-NetLoss-Dividends=$55,690-$12,150-$28,000=$15,540

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Most popular questions from this chapter

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.

Answer the following questions: Requirements 1. What type of normal balance does the Retained Earnings account have—debit or credit? 2. Which type of income statement account has the same type of balance as the Retained Earnings account? 3. Which type of income statement account has the opposite type of balance as the Retained Earnings account? 4. What do we call the difference between total debits and total credits on the income statement section of the worksheet?

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

The unadjusted trial balance and adjustment data of Martha’s Motors at December 31, 2018, follow: Adjustment data at December 31, 2018: a. Depreciation on equipment, \(2,100. b. Accrued Wages Expense, \)1,100. c. Office Supplies on hand, \(500. d. Prepaid Insurance expired during December, \)600. e. Unearned Revenue earned during December, \(4,800. f. Accrued Service Revenue, \)1,300. 2019 transactions: a. On January 4, Martha’s Motors paid wages of \(1,900. Of this, \)1,100 related to the accrued wages recorded on December 31. b. On January 10, Martha’s Motors received \(1,500 for Service Revenue. Of this, \)1,300 is related to the accrued Service Revenue recorded on December 31. Account Title Office Supplies Cash Debit Credit Accounts Receivable Prepaid Insurance Equipment Accumulated Depreciation—Equipment Accounts Payable Wages Payable Unearned Revenue Common Stock Dividends Service Revenue Depreciation Expense—Equipment Wages Expense Insurance Expense Utilities Expense Balance \( 4,200 \) 93,200 \( 93,200 15,000 \) 34,600 52,400 7,900 3,100 18,500 17,200 1,600 27,200 1,000 2,400 1,300 Supplies Expense Total 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.

For each account listed, identify the category that it would appear on a classified balance sheet. Use the following categories: Current Assets; Long-term Investments; Property, Plant, and Equipment; Intangible Assets; Current Liabilities; Long-term Liabilities; and Stockholders’ Equity. If the item does not belong on the classified balance sheet, put an X. a. Land (used in operations) b. Accumulated Depreciation—Equipment c. Common Stock d. Service Revenue e. Investment in Starbucks Corporation (to be held long-term) f. Accounts Receivable g. Equipment h. Buildings i. Notes Payable (due in 10 years) j. Unearned Revenue k. Cash l. Accounts Payable m. Prepaid Rent n. Dividends o. Land (held for investment purposes) p. Depreciation Expense.
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