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    The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.

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    Accounting I

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    hw 4

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    The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.

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    630 views4 pages

    HW 4

    Uploaded by

    Mishalm96
    The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.

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    of 4

    Mishal Mustafa

    BTA111
    Prof. Wu
    Exercise Chapter Four
    1) Okabe Company ended its fiscal year on July 31, 2019. The company is adjusted trial balance as of the end
    of its fiscal year is shown below.

    Okabe Company
    Adjusted Trial Balance
    July 31,2019
    No. Account Titles Debit Credit
    101 Cash $9,840
    112 Accounts Receivable $8,780
    157 Equipment $15,900
    158 Accumulated Depreciation-Equipment $7,400
    201 Accounts Payable $4,220
    208 Unearned Rent Revenue $1,800
    301 Owner’s Capital $45,200
    306 Owner’s Drawings $16,000
    400 Service Revenue $64,000
    429 Rent Revenue $6,500
    711 Depreciation Expenses $8,000
    726 Salaries and Wage Expense $55,700
    732 Utilities Expense $14,900

    Instructions

    Prepare Closing Entries

    Date Account Titles and Explanation Debit Credit


    7/31 Service Revenue $64,000
    Rent Revenue $6,500
    Income Summary $69,000
    (To close revenue accounts)

    7/31 Income Summary $78,600


    Depreciation Expense $8,000
    Salaries and Wages Expense $55,700
    Utilities Expense $14,900
    (To close expense accounts)

    7/31 Owner’s Capital $9,600


    Income Summary $9,600
    (To close net income)

    7/31 Owner’s Capital $16,000


    Owner’s Drawings $16,000
    (To close drawings)
    2) (a) Prepare an income statement, owner’s equity statement, and a classified balance sheet.

    (Note: $5,000 of the notes payable become due in 2020.) D. Thao did not make any additional investments in
    the business during the year.

    (b) Prepare the closing entries.

    Thao Company
    Worksheet for the Year Ended December 31, 2019
    Adjusted Account Trial Balance
    No. Account Titles Debit Credit
    101 Cash $5,300
    112 Accounts Receivable $10,800
    126 Supplies $1,500
    130 Prepaid Insurance $2,000
    157 Equipment $27,000
    158 Accumulated Depreciation-Equipment $5,600
    200 Notes Payable $15,000
    201 Accounts Payable $6,100
    212 Salaries & Wages Payable $2,400
    230 Interest Payable $600
    301 Owner’s Capital $13,000
    306 Owner’s Drawings $7,000
    400 Service Revenue $60,000
    610 Advertising Expense $8,400
    631 Supplies Expense $4,000
    711 Depreciation Expense $5,600
    722 Insurance Expense $3,500
    726 Salaries & Wages Expense $28,000
    905 Interest Expense $600
    TOTAL $103,700 $103,700

    a) Income Statement

    Thao Company
    Income Statement
    For Year Ended December 31, 2019
    Revenues
    Service Revenues $61,000
    Expenses
    Salaries & Wages Expense $28,000
    Advertising Expense $8,400
    Supplies Expense $4,000
    Depreciation Expense $5,600
    Insurance Expense $3,500
    Interest Expense $600
    Total Expenses $50,100
    Net Income $10,900
    Owner’s Equity Statement

    Thao Company
    Owner’s Equity Statement
    For Year Ended December 31, 2019
    Owner’s Capital at beginning $13,000
    Add: Net Income $10,900
    $23,900
    Less: Drawings $7,000
    Owner’s Capital Dec. 31, 2019 $16,900

    Balance Sheet

    Thao Company
    Balance Sheet
    For Year Ended December 31, 2019
    Assets
    Current Assets
    Cash $5,300
    Accounts Receivable $10,800
    Supplies $1,500
    Prepaid Insurance $2,000
    Total Current Assets $9,600
    Property Plant & Equipment
    Equipment $27,000
    Less: Accumulated Depreciation- Equipment $5,600 $21,400
    Total Assets $41,000

    Liabilities & Stockholder Equity


    Current Liabilities
    Notes Payable $15,000
    Accounts Payable $6,100
    Salaries & Wages Payable $2,400
    Interest Payable $600
    Total Current Liabilities $24,100
    Stock Holder’s Equity
    Common Stock $16,900
    Total Liabilities and Stockholder’s Equity $41,000

    b) Closing Entries

    Date Account Titles & Explanation Debit Credit


    12/31 Service Revenue $63,000
    Income Summary $63,000
    (To close revenue accounts)

    12/31 Income Summary $50,100


    Salaries & Wages Expense $28,000
    Advertising Expense $8,400
    Supplies Expenses $4,000
    Depreciation Expenses $5,600
    Insurance Expenses $3,500
    Interest Expense $600
    (To close expense accounts)
    12/31 Income Summary $13,000
    Owner’s Capital $13,000
    (To close net income)

    12/31 Owner’s Capital $6,500


    Owner’s Drawings $6,500
    (To close drawings)
    3) List all major steps in completing an accounting cycle.

    The 8 steps involved in completing the accounting cycle are as follows:

    1) Analyze business transactions


    2) Journalize the transactions
    3) Post to ledger accounts
    4) Prepare a trial balance
    5) Journalize and post adjusting entries
    6) Prepare an adjusted trial balance
    7) Prepare financial statements
    8) Journalize post-closing trial balance

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