/*! 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} Q21E The adjusted trial balance of St... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 4: Q21E (page 224)

The adjusted trial balance of Stone Sign Company follows: Account Title Prepaid Rent Cash Debit Credit Office Supplies Equipment Accumulated Depreciation鈥擡quipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Common Stock Dividends Service Revenue Salaries Expense Rent Expense Depreciation Expense鈥擡quipment Supplies Expense Balance \( 15,400 \) 85,500 \( 85,500 100 \) 7,000 3,800 4,300 4,200 800 48,800 17,300 1,400 3,700 1,500 1,400 60,000 300 400 Utilities Expense 600 Total STONE SIGN COMPANY Adjusted Trial Balance January 31, 2018 Requirements 1. Assume Stone Sign Company has a January 31 year-end. Journalize Stone鈥檚 closing entries at January 31. 2. How much net income or net loss did Stone Sign Company earn for the year ended January 31? How can you tell?

Short Answer

Expert verified

(1) Closing entries are as follows:

Date

Accounts and Explanation

Debit

Credit

Dec. 31

Service Revenue

$17,300

Income Summary

$17,300

To close revenue.

Dec. 31

Income Summary

$6,400

Salaries Expense

$3,700

Rent Expense

$1,400

Depreciation Expense鈥擡quipment

$400

Supplies Expense

$300

Utilities Expense

$600

To close expenses.

Dec. 31

Income Summary

$10,900

Retained Earnings

$10,900

To close Income Summary

Dec. 31

Retained Earnings

$800

Dividends

$800

To close Dividends

(2) Net income is $10,900 for the year. As total expenses exceed the total revenues, it results in net income.

Step by step solution

01

Explanation on Closing Entry

Closing entry is recorded at the end of the period to close balances of the permanent account.

02

Calculation of net income

Net income is calculated as follows:

NetIncome=TotalRevenues-TotalExpenses=$17,300-$6,400=$10,900

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

Murphy Delivery Service completed the following transactions during December 2018: Dec. 1 Murphy Delivery Service began operations by receiving \(13,000 cash and a truck with a fair value of \)9,000 from Russ Murphy. The business issued Murphy shares of common stock in exchange for this contribution. 1 Paid \(600 cash for a six-month insurance policy. The policy begins December 1. 4 Paid \)750 cash for office supplies. 12 Performed delivery services for a customer and received \(2,200 cash. 15 Completed a large delivery job, billed the customer, \)3,300, and received a promise to collect the \(3,300 within one week. 18 Paid employee salary, \)800. 20 Received \(7,000 cash for performing delivery services. 22 Collected \)2,200 in advance for delivery service to be performed later. 25 Collected \(3,300 cash from customer on account. 27 Purchased fuel for the truck, paying \)150 on account. (Credit Accounts Payable) 28 Performed delivery services on account, \(1,400. 29 Paid office rent, \)1,400, for the month of December. 30 Paid \(150 on account. 31 Cash dividends of \)2,500 were paid to stockholders. Requirements

1. Record each transaction in the journal using the following chart of accounts. Explanations are not required. Cash Retained Earnings Accounts Receivable Dividends Office Supplies Income Summary Prepaid Insurance Service Revenue Truck Salaries Expense Accumulated Depreciation鈥擳ruck Depreciation Expense鈥擳ruck Accounts Payable Insurance Expense Salaries Payable Fuel Expense Unearned Revenue Rent Expense Common Stock Supplies Expense

2. Post the transactions in the T-accounts.

3. Prepare an unadjusted trial balance as of December 31, 2018.

4. Prepare a worksheet as of December 31, 2018 (optional).

5. Journalize the adjusting entries using the following adjustment data and also by reviewing the journal entries prepared in Requirement 1. Post adjusting entries to the T-accounts. CHAPTER 4 Completing the Accounting Cycle 245 Adjustment data: a. Accrued Salaries Expense, \(800. b. Depreciation was recorded on the truck using the straight-line method. Assume a useful life of five years and a salvage value of \)3,000. c. Prepaid Insurance for the month has expired. d. Office Supplies on hand, \(450. e. Unearned Revenue earned during the month, \)700. f. Accrued Service Revenue, $450.

6. Prepare an adjusted trial balance as of December 31, 2018.

7. Prepare Murphy Delivery Service鈥檚 income statement and statement of retained earnings for the month ended December 31, 2018, and the classified balance sheet on that date. On the income statement, list expenses in decreasing order by amount鈥攖hat is, the largest expense first, the smallest expense last.

8. Journalize the closing entries, and post to the T-accounts.

9. Prepare a post-closing trial balance as of December 31, 2018.

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

6. Investments in stock of another company held long-term

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鈥擡quipment 300

Accumulated Depreciation鈥擡quipment 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.)

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.

23A. Record the adjusting entry to accrue Salaries Expense

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

  1. Patents
See all solutions

Recommended explanations on Business Studies Textbooks

International Business

Read Explanation

Actuarial Science in Business

Read Explanation

Strategy

Read Explanation

Strategic Direction

Read Explanation

Family Business

Read Explanation

Introduction to Business

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.