Financial and Managerial Accounting (Looseleaf) (Custom Package)
Financial and Managerial Accounting (Looseleaf) (Custom Package)
6th Edition
ISBN: 9781259754883
Author: Wild
Publisher: MCG
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Chapter 3, Problem 6PSB

1.

To determine

To prepare:

Ledger account, according to balance column format.

1.

Expert Solution
Check Mark

Explanation of Solution

Cash Acct. No. 101
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (1)

The ending balance is $0.

Accounts Receivable Acct. No. 106
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (2)

The ending balance is $0.

Office Supplies Acct. No. 124
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (3)

The ending balance is $0.

Prepaid Insurance Acct. No. 128
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (4)

The ending balance is $0.

Buildings Acct. No. 173
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (5)

The ending balance is $0.

Accumulated depreciation
Buildings
Acct. No. 174
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (6)

The ending balance is $0.

Salaries Payable Acct. No. 209
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (7)

The ending balance is $0.

Common Stock Acct. No. 307
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (8)

The ending balance is $0.

Retained Earnings Acct. No. 318
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (9)

The ending balance is $0.

Dividends Acct. No. 319
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (10)

The ending balance is $0.

Storage Fees Earned Acct. No. 406
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (11)

The ending balance is $0.

Depreciation Expense
Buildings
Acct. No. 606
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (12)

The ending balance is $0.

Salaries Expense Acct. No. 622
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (13)

The ending balance is $0.

Insurance Expense Acct. No. 637
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (14)

The ending balance is $0.

Rent Expense Acct. No. 640
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (15)

The ending balance is $0.

Office Supplies Expense Acct. No. 650
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (16)

The ending balance is $0.

Repairs Expense Acct. No. 684
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (17)

The ending balance is $0.

Telephone expense Acct. No. 688
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (18)

The ending balance is $0.

Income Summary Acct. No. 901
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (19)

The ending balance is $0.

2.

To determine

To prepare:

Journal entry and post them to ledger account

2.

Expert Solution
Check Mark

Explanation of Solution

Common Stock issued in exchange for Cash and Computer Equipment.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 1 Cash   30,000  
  Buildings   150,000  
  Common Stock     180,000
  (Being common stock issued in exchange for cash and building )      

Table (20)

• Cash is an asset. Since, cash is received, it increases asset. Hence debit cash account.

• Building is an asset. Since, building is received, asset is increased. Hence, debit building accounts.

• Common stock is a liability. Since, common stock is issued, liability is increased. Hence, credit common stock account.

Rent paid for one month worth $2,000.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 2 Rent Expense   2,000  
  Cash     2,000
  (Being rent paid for the first month))      

Table (21)

• Rent Expense is an expense. Since, expense reduces equity, debit rent expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

Office Supplies Worth $2,400 purchased for cash.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 3 Office Supplies   2,400  
  Cash     2,400
  (Being Office supplies worth $2,400 purchased)      

Table (22)

• Office Supplies is an asset. Since, office supplies is purchased, it increases asset. Hence, debit office supplies account.

• Cash is an asset. Since, cash is used to buy asset, cash is reduced. Hence, credit cash account.

Insurance purchased worth$7,200 for cash.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 10 Prepaid Insurance   7,200  
  Cash     7,200
  (Being Insurance purchased)      

Table (23)

• Prepaid Insurance is an Asset. Since, insurance is purchased, asset is created. Hence, debit prepaid insurance account.

• Cash is an asset. Since, cash is used to buy asset, cash is reduced. Hence, credit cash account.

Salary Expense worth $1,000 paid for two weeks of work.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 14 Salary Expense   1,000  
  Cash     1,000
  (Being Salary paid for two weeks of work)      

Table (24)

• Salary Expense is an expense. Since, expense reduces equity, debit salary expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

Storage fees worth of $9,800 is received from customers.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 24 Cash   9,800  
  Storage fees earned     9,800
  (Being storage fees received from customers)      

Table (25)

• Cash is an asset. Since, commission is earned and payment is received, it increases cash. Hence, debit cash account.

• Storage fees earned is a revenue account. Since, income is earned, revenue is increased. Hence, credit storage fees earned account.

Salary Expense worth $1,000 paid for two weeks of work.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 28 Salary Expense   1,000  
  Cash     1,000
  (Being Salary paid for two weeks of work)      

Table (26)

• Salary Expense is an expense. Since, expense reduces equity, debit salary expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

Cash worth $950 used for repairs of company’ computer.

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 29 Repair Expense   950  
  Cash     950
  (Being cash spend on repairs)      

Table (27)

• Repair Expense is an expense. Since, expense reduces equity, debit repair expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

Telephone expenses paid by company worth $400

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 30 Telephone Expense   400  
  Cash     400
  (Being telephone expenses paid)      

Table (28)

• Telephone Expense is an expense. Since, expense reduces equity, debit telephone expense account.

• Cash is an asset. Since, cash is used to pay expense, asset is reduced. Hence, credit cash account.

Dividend paid by company worth $2,000

Date Account Title and Explanation Post ref Debit
($)
Credit
($)
July 31 Dividends   2,000  
  Cash     2,000
  (Being dividend paid by company)      

Table (29)

• Dividend is a payment made to shareholders. Since, it reduce equity, debit dividend account.

• Cash is an asset. Since, cash is used to pay dividend, cash is reduced. Hence, credit cash account.

Posting of journal entries to ledger account:

Cash Acct. No. 101
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Common Stock   30,000   30,000
July 2 Rent Expenses     2,000 28,000
July 3 Office supplies     2,400 25,600
July 10 Prepaid Insurance     7,200 18,400
July 14 Salary Expense     1,000 17,400
July 24 Storage fees earned   9,800   27,200
July 28 Salary Expense     1,000 26,200
July 29 Repair Expense     950 25,250
July 30 Telephone Expense     400 24,850
July 31 Dividend     2,000 22,850

Table (30)

The ending balance is $22,850.

Accounts Receivable Acct. No. 106
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (31)

The ending balance is $0.

Office Supplies Acct. No. 124
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 3 Cash   2,400   2,400

Table (32)

The ending balance is $2,400.

Prepaid Insurance Acct. No. 128
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 10 Cash   7,200   7,200

Table (33)

The ending balance is $7,200.

Buildings Acct. No. 173
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Common stock   150,000   150,000

Table (34)

The ending balance is $150,000.

Accumulated depreciation
Buildings
Acct. No. 174
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (35)

The ending balance is $0.

Salaries Payable Acct. No. 209
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (36)

The ending balance is $0.

Common Stock Acct. No. 307
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Cash     30,000 30,000
July 1 Buildings     150,000 180,000

Table (37)

The ending balance is $180,000.

Retained Earnings Acct. No. 318
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (38)

The ending balance is $0.

Dividends Acct. No. 319
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Cash   2,000   2,000

Table (39)

The ending balance is $2,000.

Storage Fees Earned Acct. No. 406
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 24 Cash     9,800 9,800

Table (40)

The ending balance is $9,800.

Depreciation Expense
Buildings
Acct. No. 606
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (41)

The ending balance is $0.

Salaries Expense Acct. No. 622
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 14 Cash   1,000   1,000
July 28 Cash   1,000   2,000

Table (42)

The ending balance is $2,000.

Insurance Expense Acct. No. 637
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (43)

The ending balance is $0.

Rent Expense Acct. No. 640
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 2 Cash   2,000   2,000

Table (44)

The ending balance is $2,000.

Office Supplies Expense Acct. No. 650
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (45)

The ending balance is $0.

Repairs Expense Acct. No. 684
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 29 Cash   950   950

Table (46)

The ending balance is $950.

Telephone expense Acct. No. 688
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 30 Cash   400   400

Table (47)

The ending balance is $400.

Income Summary Acct. No. 901
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (48)

The ending balance is $0.

3.

To determine

To prepare:

An unadjusted trial balance.

3.

Expert Solution
Check Mark

Explanation of Solution

Prepare unadjusted trial balance as follow:

S.S. Company
Unadjusted Trial Balance
As on April 30, 2015
Particulars Debit
($)
Credit
($)
Cash 22,850  
Accounts Receivable 0  
Office Supplies 2,400  
Prepaid Insurance 7,200  
Building 150,000  
Accumulated Depreciation-Building   0
Salaries Payable   0
Common Stock   180,000
Retained earnings   0
Dividends 2,000  
Storage fees earned   9,800
Depreciation Expense-Building 0  
Salaries Expenses 2,000  
Rent Expenses 2,000  
Office Supply Expense 0  
Repairs Expenses 950  
Telephone Expense 400  
Insurance Expense 0  
Income Summary   0
Total 189,800 189,800

Table (49)

Thus, the total of unadjusted trial balance on 31th July, 2015 is $189,800.

4.

To determine

To prepare:

Adjusting entry.

4.

Expert Solution
Check Mark

Explanation of Solution

a.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Insurance Expense   400  
  Prepaid Insurance     400
  (Being insurance coverage worth $400has expired)      

Table (50)

• Insurance expense is an expense. Since, expense reduces equity, debit insurance expense account.

• Prepaid Insurance is an asset. Since, some of the insurance used up, it reduces asset. Hence, credit prepaid insurance account.

b.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Office Supplies Expense   875  
  Office Supply     875
  (Being $875 worth of office Supplies got exhausted)      

Table (51)

• Office supplies expense is an expense. Since, expense reduces equity, debit office supplies expense account.

• Office supplies are an asset. Since, some of asset used up, it reduces asset. Hence, credit office supply account.

Working note:

Calculation of office supply expense,

Officesupplyexpense=TotalofficesupplyClosing officesupply=$2,400$1,525=$875

c.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Depreciation Expense   1,500  
  Accumulated Depreciation-Building     1,500
  (Being depreciation is recorded)      

Table (52)

• Depreciation Expense is an expense. Since, expense reduces equity, debit depreciation expense account.

• Accumulated Depreciation-Building is a Contra asset. Since, it has a normal credit balance. Hence, credit accumulated depreciation-building account.

d.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Salary Expense   100  
  Salary Payable     100
  (Being salaries worth $100 due to be paid)      

Table (53)

• Salary expense is an expense. Since, expense reduces equity, debit salary expense account.

• Salary Payable is a liability. Since, expense has occurred but not paid yet, it increases liability. Hence, credit salary payable account.

e.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Accounts Receivable   1,150  
  Storage fees earned     1,150
  (Being storage fees earned but not received yet)      

Table (54)

• Accounts Receivable is an asset. Since income is earned but received yet, it increases asset. Hence, debit accounts receivable account.

• Storage fees earned are an income. Since money is earned, income is increased. Hence, credit storage fees earned account.

Posting of adjusting entries to ledger account:

Cash Acct. No. 101
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Common Stock   30,000   30,000
July 2 Rent Expenses     2,000 28,000
July 3 Office supplies     2,400 25,600
July 10 Prepaid Insurance     7,200 18,400
July 14 Salary Expense     1,000 17,400
July 24 Storage fees earned   9,800   27,200
July 28 Salary Expense     1,000 26,200
July 29 Repair Expense     950 25,250
July 30 Telephone Expense     400 24,850
July 31 Dividend     2,000 22,850

Table (54)

The ending balance is $22,850.

Accounts Receivable Acct. No. 106
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Storage fees earned   1,150   1,150

Table (55)

The ending balance is $1,150.

Office Supplies Acct. No. 124
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 3 Cash   2,400   2,400
July 31 Office supplies expense     875 1,525

Table (56)

The ending balance is $1,525.

Prepaid Insurance Acct. No. 128
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 10 Cash   7,200   7,200
July 31 Insurance expense     400 6,800

Table (57)

The ending balance is $6,800.

Buildings Acct. No. 173
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Common stock   150,000   150,000

Table (58)

The ending balance is $150,000.

Accumulated depreciation
Buildings
Acct. No. 174
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Depreciation expense     1,500 1,500

Table (59)

The ending balance is $1,500.

Salaries Payable Acct. No. 209
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Salary expense     100 100

Table (60)

The ending balance is $100.

Common Stock Acct. No. 307
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Cash     30,000 30,000
July 1 Buildings     150,000 180,000

Table (61)

The ending balance is $180,000.

Retained Earnings Acct. No. 318
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (62)

The ending balance is $0.

Dividends Acct. No. 319
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Cash   2,000   2,000

Table (63)

The ending balance is $2,000.

Storage Fees Earned Acct. No. 406
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 24 Cash     9,800 9,800
July 31 Accounts receivable     1,150 10,950

Table (64)

The ending balance is $10,950.

Depreciation Expense
Buildings
Acct. No. 606
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Accumulated depreciation-Buildings   1,500   1,500

Table (65)

The ending balance is $1,500.

Salaries Expense Acct. No. 622
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 14 Cash   1,000   1,000
July 28 Cash   1,000   2,000
July 31 Salaries payable   100   2,100

Table (66)

The ending balance is $2,100.

Insurance Expense Acct. No. 637
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Prepaid insurance   400   400

Table (67)

The ending balance is $400.

Rent Expense Acct. No. 640
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 2 Cash   2,000   2,000

Table (68)

The ending balance is $2,000.

Office Supplies Expense Acct. No. 650
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Office supplies   875   875

Table (69)

The ending balance is $875.

Repairs Expense Acct. No. 684
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 29 Cash   950   950

Table (70)

The ending balance is $950.

Telephone expense Acct. No. 688
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 30 Cash   400   400

Table (71)

The ending balance is $400.

Income Summary Acct. No. 901
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)

Table (72)

The ending balance is $0.

5.

To determine

To prepare:

An adjusted trial balance, income statement, statement of retained earnings and balance sheet.

5.

Expert Solution
Check Mark

Explanation of Solution

S.S. Company
Adjusted Trial Balance
As on July 31, 2015
Particulars Debit
($)
Credit
($)
Cash 22,850  
Accounts Receivable 1,150  
Office Supplies 1,525  
Prepaid Insurance 6,800  
Buildings 150,000  
Accumulated Depreciation-Buildings   1,500
Salaries Payable   100
Common Stock   180,000
Retained earnings   0
Dividends 2,000  
Storage fees Earned   10,950
Depreciation Expense-Buildings 1,500  
Salaries Expenses 2,100  
Rent Expenses 2,000  
Office Supply Expense 875  
Repairs Expenses 950  
Telephone Expense 400  
Insurance Expense 400  
Income Summary   0
Total 192,550 192,550

Table (73)

Thus, the total of adjusted trial balance on 31thJuly, 2017 is $192,550.

Prepare income statement.

S.S. Company
Income Statement
For month ended July 31, 2015
Particulars Amount
($)
Amount
($)
Revenue:    
Service Revenue 10,950  
Total Revenue   10,950
Expenses:    
Depreciation Expense-Buildings 1,500  
Salaries Expenses 2,100  
Rent Expenses 2,000  
Office Supply Expense 875  
Repairs Expenses 950  
Telephone Expense 400  
Insurance Expense 400  
Total Expense   8,225
Net income   2,725

Table (74)

Thus, net income of S.S. Company is $2,725.

Prepare statement of retained earnings statement:

S.S. Company
Statement of Retained Earnings
For month ended July 31, 2015
Particulars Amount
($)
Opening balance of retained earnings 0
Net income 2,725
  2,725
Dividends (2,000)
Ending balance of retained earnings 725

Table (75)

Therefore, retained earnings of S.S. Company are $725.

Prepare balance sheet:

S.S. Company
Balance sheet
As on July 31, 2015
Particulars Amount
($)
Amount
($)
Assets    
Cash   22,850
Office Supplies   1,525
Account Receivables   1,150
Prepaid Insurance   6,800
Buildings 150,000  
Less: Accumulated depreciation (1,500) 148,500
Total Assets   180,825
Liabilities and Stockholder’s Equity    
Liabilities    
Salaries Payable   100
Stockholder’s Equity    
Common Stock 180,000  
Retained earnings 725  
Total stockholders’ equity   180,725
Total Liabilities and Stockholder’s equity   180,825

Table (76)

Thus, the balance sheet total is $180,825.

6.

To determine

To prepare:

Closing entries.

6.

Expert Solution
Check Mark

Explanation of Solution

Transfer service revenue to income summary account for closing.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Service Revenue   10,950  
  Income Summary     10,950
  (Being service revenue transfer to income summary account)      

Table (78)

• Service revenue is revenue account. Since, revenue is transferred to income summary account, it reduces revenue. Hence, debit service revenue account.

• Income summary is a temporary account. Since, it is used for closing revenue account. Hence, credit income summary account.

All expenses transfer to income summary account for closing.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Income summary   8,225  
  Depreciation Expense-Buildings     1,500
  Salaries Expenses     2,100
  Rent Expenses     2,000
  Office Supply Expense     875
  Repairs Expenses     950
  Telephone Expense     400
  Insurance Expense     400
  (Being all expenses transfer to income summary account)      

Table (79)

• Income summary is a temporary account. Since, it is used for closing expense account. Hence, debit income summary account.

• All expenses are expenses. Since, expenses are transferred to income summary account, expenses is reduced. Hence, credit all expenses account

Balance of income summary transfer to income summary account for closing.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Income Summary   2,725  
  Retained Earning     2,725
  (Being net income transfer to retained earnings)      

Table (80)

• Income summary is a temporary account. Since, it is used for transferring net income summary to retained account. Hence, debit income summary account.

• Retained earnings come under stockholder’s equity. Since, retained earning has increased. Hence, credit retained earning account.

Deduct dividend from retained earnings.

Date Particulars Post ref Debit
($)
Credit
($)
July 31 Retained Earning   2,000  
  Dividend     2,000
  (Being dividend distributed)      

Table (81)

• Retained earnings come under stockholder’s equity. Since, retained earnings is used to pay dividend, retained earnings has decreased. Hence, debit retained earnings account.

• Dividend is distributed from profit. Since it reduces retained earnings. Hence, credit dividend account.

Posting of closing entries into ledger account:

Cash Acct. No. 101
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Common stock   30,000   30,000
July 2 Rent expenses     2,000 28,000
July 3 Office supplies     2,400 25,600
July 10 Prepaid insurance     7,200 18,400
July 14 Salary expense     1,000 17,400
July 24 Storage fees earned   9,800   27,200
July 28 Salary expense     1,000 26,200
July 29 Repair expense     950 25,250
July 30 Telephone expense     400 24,850
July 31 Dividend     2,000 22,850

Table (82)

The ending balance is $22,850.

Accounts Receivable Acct. No. 106
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Storage fees earned   1,150   1,150

Table (83)

The ending balance is $1,150.

Office Supplies Acct. No. 124
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 3 Cash   2,400   2,400
July 31 Office supplies expense     875 1525

Table (84)

The ending balance is $1,525.

Prepaid Insurance Acct. No. 128
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 10 Cash   7,200   7,200
July 31 Insurance expense     400 6,800

Table (85)

The ending balance is $6,800.

Buildings Acct. No. 173
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Common stock   150,000   150,000

Table (86)

The ending balance is $150,000.

Accumulated depreciation
Buildings
Acct. No. 174
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Depreciation expense     1,500 1,500

Table (87)

The ending balance is $1,500.

Salaries Payable Acct. No. 209
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Salary expense     100 100

Table (88)

The ending balance is $100.

Common Stock Acct. No. 307
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 1 Cash     30,000 30,000
July 1 Buildings     150,000 180,000

Table (89)

The ending balance is $180,000.

Retained Earnings Acct. No. 318
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Income summary     2,725  
July 31 Dividend   2,000   725

Table (90)

The ending balance is $0.

Dividends Acct. No. 319
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Cash   2,000   2,000
July 31 Retained earnings     2,000 0

Table (91)

The ending balance is $0.

Storage Fees Earned Acct. No. 406
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 24 Cash     9,800 9,800
July 31 Accounts receivable     1,150 10,950
July 31 Income summary   10,950   0

Table (92)

The ending balance is $0.

Depreciation Expense
Buildings
Acct. No. 606
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Accumulated depreciation- Buildings   1,500   1,500
July 31 Income summary     1,500 0

Table (93)

The ending balance is $0.

Salaries Expense Acct. No. 622
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 14 Cash   1,000   1,000
July 28 Cash   1,000   2,000
July 31 Salaries payable   100   2,100
July 31 Income summary     2,100 0

Table (94)

The ending balance is $0.

Insurance Expense Acct. No. 637
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Prepaid insurance   400   400
July 31 Income summary     400 0

Table (95)

The ending balance is $0.

Rent Expense Acct. No. 640
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 2 Cash   2,000   2,000
July 31 Income summary     2,000 0

Table (96)

The ending balance is $0.

Office Supplies Expense Acct. No. 650
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Office supplies   875   875
July 31 Income summary     875 0

Table (97)

The ending balance is $0.

Repairs Expense Acct. No. 684
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 29 Cash   950   950
July 31 Income summary     950 0

Table (98)

The ending balance is $0.

Telephone expense Acct. No. 688
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 30 Cash   400   400
July 31 Income summary     400 0

Table (99)

The ending balance is $0.

Income Summary Acct. No. 901
Date Account Title and Explanation Post ref Debit
($)
Credit
($)
Balance
($)
July 31 Service Revenue     10,950 10,950
July 31 Depreciation Expense-Buildings   1,500   9,450
July 31 Salaries Expenses   2,100   7,350
July 31 Rent Expenses   2,000   5,350
July 31 Office Supply Expense   875   4,475
July 31 Repairs Expenses   950   3,525
July 31 Telephone Expense   400   3,125
July 31 Insurance Expense   400   2,725
July 31 Retained earnings   2,725   0

Table (100)

The ending balance is $0.

7.

To determine

To prepare:

A post closing trial balance.

7.

Expert Solution
Check Mark

Explanation of Solution

Prepare adjusted trial balance as follow:

S.S. Company
Adjusted Trial Balance
As on July 31, 2015
Particulars Debit
($)
Credit
($)
Cash 22,850  
Accounts Receivable 1,150  
Office Supplies 1,525  
Prepaid Insurance 6,800  
Buildings 150,000  
Accumulated Depreciation-Buildings   1,500
Salaries Payable   100
Common Stock   180,000
Retained earnings   725
Dividends 0  
Storage fees Earned   0
Depreciation Expense-Buildings 0  
Salaries Expenses 0  
Rent Expenses 0  
Office Supply Expense 0  
Repairs Expenses 0  
Telephone Expense 0  
Insurance Expense 0  
Income Summary 0 0
Total 182,325 182,325

Table (101)

Thus, the total of post-closing trial balance on 31th July, 2015 is $182,325.

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Chapter 3 Solutions

Financial and Managerial Accounting (Looseleaf) (Custom Package)

Ch. 3 - Prob. 6DQCh. 3 - Prob. 7DQCh. 3 - Prob. 8DQCh. 3 - A If a company initially records prepaid expenses...Ch. 3 - Prob. 10DQCh. 3 - Prob. 11DQCh. 3 - Prob. 12DQCh. 3 - Prob. 13DQCh. 3 - Prob. 14DQCh. 3 - Prob. 15DQCh. 3 - Prob. 16DQCh. 3 - Prob. 17DQCh. 3 - Prob. 18DQCh. 3 - Prob. 19DQCh. 3 - Prob. 20DQCh. 3 - Prob. 21DQCh. 3 - Prob. 22DQCh. 3 - Prob. 23DQCh. 3 - Prob. 24DQCh. 3 - Prob. 25DQCh. 3 - Prob. 26DQCh. 3 - Prob. 27DQCh. 3 - Prob. 28DQCh. 3 - Prob. 29DQCh. 3 - Periodic reporting C1 Choose from the following...Ch. 3 - Computing accrual and cash income C1 In its first...Ch. 3 - Identifying accounting adjustments P1 Classify the...Ch. 3 - Prob. 4QSCh. 3 - Prepaid (deferred) expenses adjustments P1 For...Ch. 3 - Prepaid (deferred) expense adjustments P1 For each...Ch. 3 - Prob. 7QSCh. 3 - Prob. 8QSCh. 3 - Prob. 9QSCh. 3 - Prob. 10QSCh. 3 - Prob. 11QSCh. 3 - Prob. 12QSCh. 3 - Prob. 13QSCh. 3 - Prob. 14QSCh. 3 - Recording and analyzing adjusting entries P1...Ch. 3 - Prob. 16QSCh. 3 - Prob. 17QSCh. 3 - Prob. 18QSCh. 3 - Prob. 19QSCh. 3 - A preparing adjusting entries P4 Cal Consulting...Ch. 3 - Preparing closing entries from the ledger P4 The...Ch. 3 - Identifying post-closing accounts P5 Identify...Ch. 3 - identifying the accounting cycle C2 List the...Ch. 3 - Classifying balance sheet items C3 The following...Ch. 3 - Identifying current accounts and computing the...Ch. 3 - Prob. 26QSCh. 3 - Prob. 27QSCh. 3 - Prob. 1ECh. 3 - Exercise 3-2 Adjusting and paying accrued expenses...Ch. 3 - Prob. 3ECh. 3 - Prob. 4ECh. 3 - Prob. 5ECh. 3 - Prob. 6ECh. 3 - Prob. 7ECh. 3 - Prob. 8ECh. 3 - Prob. 9ECh. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 1PSACh. 3 - Prob. 2PSACh. 3 - Prob. 3PSACh. 3 - Prob. 4PSACh. 3 - Prob. 5PSACh. 3 - Prob. 6PSACh. 3 - Prob. 7PSACh. 3 - Prob. 8PSACh. 3 - Prob. 1PSBCh. 3 - Prob. 2PSBCh. 3 - Prob. 3PSBCh. 3 - Prob. 4PSBCh. 3 - Prob. 5PSBCh. 3 - Prob. 6PSBCh. 3 - Prob. 7PSBCh. 3 - Prob. 8PSBCh. 3 - Prob. 3SPCh. 3 - Prob. 1GLPCh. 3 - Prob. 2GLPCh. 3 - Prob. 3GLPCh. 3 - Prob. 4GLPCh. 3 - Prob. 5GLPCh. 3 - Prob. 6GLPCh. 3 - Prob. 1BTNCh. 3 - Prob. 2BTNCh. 3 - Prob. 3BTNCh. 3 - Prob. 4BTNCh. 3 - Prob. 5BTNCh. 3 - Prob. 6BTNCh. 3 - Prob. 7BTNCh. 3 - Prob. 8BTNCh. 3 - Prob. 9BTN
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