/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q11SE The following balances appear on... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 4: Q11SE (page 219)

The following balances appear on the books of Sarah Simmons Enterprises: Retained Earnings, \(29,600; Dividends, \)10,500; Income Summary, \(0; Service Revenue, \)24,500; Salaries Expense, \(6,200; Rent Expense, \)3,500; and Advertising Expense, $2,000. All accounts have normal balances. Requirements 1. Open a T-account for each account, and insert its adjusted balance as given (denote as Adj. Bal.) at December 31. 2. Post the closing entries to the accounts, denoting posted amounts as Clos. 3. Compute the ending balance of Retained Earnings.

Short Answer

Expert verified

(1) T accounts are prepared in Step 1.

(2) Closing entries are posted in Step 2.

(3) Ending balance of Retained Earnings equals $31,900.

Step by step solution

01

T-account of each account

T-accounts are as follows:

Retained Earnings

$29,600

Adj.Bal.

Dividends

Adj. Bal.

$10,500

Income Summary

Service Revenue

$24,500

Adj.Bal.

Salaries Expense

Adj. Bal.

$6,200

Rent Expense

Adj. Bal.

$3,500

Advertising Expense

Adj. Bal.

$2,000

02

Posting of closing entry in T-accounts

Posting of closing entry is shown as follows:

Retained Earnings

$29,600

Adj. Bal.

Clos.

$10,500

$12,800

Clos.

$31,900

Bal.

Dividends

Adj. Bal.

$10,500

$10,500

Clos.

Bal.

0

Income Summary

Clos.

$11,700

$24,500

Clos.

$12,800

Bal.

Clos.

$12,800

0

Bal.

Service Revenue

Clos.

$24,500

$24,500

Adj. Bal.

0

Bal.

Salaries Expense

Adj. Bal.

$6,200

$6,200

Clos.

Bal.

0

Rent Expense

Adj. Bal.

$3,500

$3,500

Clos.

Bal.

0

Advertising Expense

Adj. Bal.

$2,000

$2,000

Clos.

Bal.

0

03

Calculation of ending balance of Retained Earnings

Ending balance of retained earnings is calculated as follows:

EndingBalance=BeginningBalance+NetIncome-Dividends=$29,600+$12,800-$10,500=$31,900

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.

20. Retained Earnings

Answer the following questions: Requirements 1. What type of normal balance does the Retained Earnings account have鈥攄ebit 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?

Grant Film Productions wishes to expand and has borrowed \(100,000. As a condition for making this loan, the bank requires that the business maintain a current ratio of at least 1.50. Business has been good but not great. Expansion costs have brought the current ratio down to 1.40 on December 15. Rita Grant, owner of the business, is considering what might happen if she reports a current ratio of 1.40 to the bank. One course of action for Grant is to record in December \)10,000 of revenue that the business will earn in January of next year. The contract for this job has been signed. Requirements 1. Journalize the revenue transaction, and indicate how recording this revenue in December would affect the current ratio. 2. Discuss whether it is ethical to record the revenue transaction in December. Identify the accounting principle relevant to this situation, and give the reasons underlying your conclusion.

For each account listed, identify whether the account would appear in either the income statement section or the balance sheet section of the worksheet. Assuming normal balances, identify if the account would be recorded in the debit (DR) or credit (CR)

Winters Landscape Services accrued \(4,000 of Salaries Expense at December 31. Winters paid the next payroll at January 10 of

\)6,000. This payment included the accrued amount at December 31, plus $2,000 for the first few days of January.

25A. Journalize the cash payment
See all solutions

Recommended explanations on Business Studies Textbooks

Operational Management

Read Explanation

Managers

Read Explanation

Family Business

Read Explanation

Business Development

Read Explanation

Human 91影视

Read Explanation

Organizational Communication

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.