Page 186 - Accounting Principles (A Business Perspective)

4. Completing the accounting cycle

Notes Receivable 4,000
Prepaid Insurance 960
Prepaid Rent 2,400
Supplies on Hand 600
Equipment 60,000
Accumulated Depreciation—Equipment $ 12,500
Buildings 140,000
Accumulated Depreciation—Buildings 15,000
Land 56,240
Accounts Payable 60,000
Notes Payable 10,000
Interest Payable 750
Salaries Payable 7,000
Capital Stock 100,000
Retained Earnings, 2010 January 1 20,200
Dividends 40,000
Service Revenue 360,000
Insurance Expense 1,920
Rent Expense 9,600
Advertising Expense 1,200
Depreciation Expense—Equipment 2,500
Depreciation Expense—Buildings 3,000
Supplies Expense 2,280
Salaries Expense 150,000
Interest Expense 750
Interest Revenue 200
$ 585,650 $ 585,650
a. Prepare an income statement.
b. Prepare a statement of retained earnings.
c. Prepare a classified balance sheet.

d. Prepare the closing journal entries.
e. Show the post-closing trial balance assuming you had posted the closing entries to the general ledger.
Problem C The following trial balance and additional data are for Sure Sale Reality Company
SURE SALE REALTY COMPANY
Trial Balance
2010 December 31
Debits Credits
Cash $ 62,800
Accounts Receivable 117,120
Prepaid Rent 46,080
Equipment 173,760
Accumulated Depreciation—Equipment $ 21,120
Accounts Payable 62,400
Capital Stock 96,000
Retained Earnings, 2010 January 1 49,920
Dividends 46,080
Commissions Revenue 653,200

187