Page 190 - Accounting Principles (A Business Perspective)

4. Completing the accounting cycle

Notes Payable (due 2011) 64,000
Capital Stock 120,000
Retained Earnings, 2010 January 1 42,800
Dividends 40,000
Commissions Revenue 392,520
Advertising Expense 24,000
Commissions Expense 75,440
Travel Expense 12,880
Depreciation Expense—Buildings 8,500
Salaries Expense 98,400
Depreciation Expense—Office Equipment 2,800
Supplies Expense 3,800
Insurance Expense 3,600
Repairs Expense 1,900
Utilities Expense 3,400
Interest Expense 1,800
Interest Revenue 1,600
$ 726,320 $ 726,320

a. Prepare an income statement for the year ended 2010 December 31.
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.
Alternate problem C The following trial balance and additional data are for Ramon Data Processing
Company:

RAMON DATA PROCESSING COMPANY
Trial Balance
2010 December 31
Debits Credits
Cash $ 76,000
Accounts Receivable 98,000
Prepaid Rent 7,200
Prepaid Insurance 2,400
Equipment 80,000
Accumulated Depreciation—Equipment $ 40,000
Accounts Payable 30,000
Capital Stock 100,000
Retained Earnings, 2010 January 1 65,600
Dividends 24,000
Service Revenue 370,000
Commissions Expense 270,000
Travel Expense 36,000
Miscellaneous Expense 12,000
$ 605,600 $ 605,600

The prepaid rent is for the period 2010 January 1, to 2011 December 31.
The equipment is expected to last 10 years with no salvage value.

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