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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鈥擡quipment

$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鈥擡quipment

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

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?

The adjusted trial balance for Green Advertising Services is presented below: Account Title Office Supplies Cash Debit Credit Accounts Receivable Building Accumulated Depreciation鈥擝uilding Furniture Accumulated Depreciation鈥擣urniture Land Salaries Payable Accounts Payable Unearned Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Supplies Expense Depreciation Expense鈥擝uilding Balance \( 14,000 \) 195,200 \( 195,200 18,400 14,100 \) 36,100 19,600 7,200 10,600 30,000 31,400 16,000 18,300 49,800 8,400 28,600 2,900 1,300 13,500 15,800 6,500 47,900 Depreciation Expense鈥擣urniture Advertising Expense Total GREEN ADVERTISING SERVICES Adjusted Trial Balance December 31, 2018 Requirements 1. Prepare the income statement for the year ending December 31, 2018. 2. Prepare the statement of retained earnings for the year ending December 31, 2018. 3. Prepare the classified balance sheet as of December 31, 2018. Use the report form

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?

On December 1, Curt Wilson began an auto repair shop, Wilson鈥檚 Quality Automotive. The following transactions occurred during December: Dec. 1 Wilson contributed \(63,000 cash to the business in exchange for shares of common stock. 1 Purchased \)14,400 of equipment paying cash. 1 Paid \(3,600 for a twelve-month insurance policy starting on December 1. 9 Paid \)15,000 cash to purchase land to be used in operations. 10 Purchased office supplies on account, \(2,200. 19 Borrowed \)24,000 from the bank for business use. Wilson signed a notes payable to the bank in the name of the corporation. The note is due in five years. 22 Paid \(2,000 for advertising expenses. 26 Paid \)1,000 on account. 28 The business received a bill for utilities to be paid in January, \(260. 31 Revenues earned during the month included \)18,500 cash and \(3,800 on account. 31 Paid employees鈥� salaries \)3,900 and building rent \(800. Record as a compound entry. 31 The business received \)1,380 for auto screening services to be performed next month. 31 Paid cash dividends of \(5,000 to stockholders. The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Land; Equipment; Accumulated Depreciation鈥擡quipment; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Notes Payable; Common Stock; Retained Earnings; Dividends; Income Summary; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense鈥擡quipment. Adjustment data: a. Office Supplies used during the month, \)600. b. Depreciation for the month, \(240. c. One month insurance has expired. d. Accrued Interest Expense, \)120. Requirements 1. Prepare the journal entries, and post to the T-accounts. 2. Prepare an unadjusted trial balance. 3. Complete the worksheet for the month ended December 31, 2018 (optional). 4. Prepare the adjusting entries, and post to the T-accounts. 5. Prepare an adjusted trial balance. 6. Prepare the income statement, the statement of retained earnings, and the classified balance sheet in report form. 7. Prepare the closing entries, and post to the T-accounts. 8. Prepare a post-closing trial balance.

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)

column.

9. Accounts Payable
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