Depreciation expense: studio equipmentIncome taxes expense8,800Adjusting and Closing Entries5,000Totals$248,210| $248,210Brushstroke Art Studio, Inc., provides quality instruction to aspiring artists. The businessadjusts its accounts monthly, but performs closing entries annually on December 31.This is the studio's unadjusted trial balance dated December 31, current year.Other Data1. Supplies on hand at December 31, current year, total $1,000.2. The studio pays rent quarterly (every three months). The last payment was madeNovember 1, current year. The next payment will be made early in February, nextBRUSHSTROKE ART STUDIO, INC.UNADJUSTED TRIAL BALANCEyear.DECEMBER 31, CURRENT YEAR3. Studio equipment is being depreciated over 120 months (10 years).4. On October 1, current year, the studio borrowed $24,000 by signing a 12-month,12 percent note payable. The entire amount, plus interest, is due on September 30,Debits |CreditsCash$22,380Client fees receivable71,250next year.Supplies6,0005. At December 31, current year, $3,000 of previously unearned client fees had beenPrepaid studio rent2,500earned.Studio equipment96,0006. Accrued, but unrecorded and uncollected client fees earned total $690 at DecembeAccumulated depreciation: studio equipment $52,000Accounts payable6,42031, current year.Note payable7. Accrued, but unrecorded and unpaid salary expense totals $750 at December 31,24,000Interest payable480current year.8. Accrued income taxes expense for the entire year ending December 31, currentyear, total $7,000. The full amount is due early in the next year.Unearned client fees8,000Income taxes payable5,000Capital stock50,000InstructionsRetained earnings20,0001. Prepare the necessary year-end closing entries.2. Prepare an after-closing trial balance.Client fees earned82,310Supplies expense4,000Salary expense17,250Fim do documentoInterest expense480Studio rent expense11,250Utilities expense3,300

What is meant by Closing Entries? Closing entries are the journal entries passed at the end of the…

Answered: Adjusting and Closing Entries…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter12: Intangibles

Section: Chapter Questions

Problem 13E

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