Salt Creek Golf Inc. was organized on July 1, 2017. Quarterly financial statemen

Question

Salt Creek Golf Inc. was organized on July 1, 2017. Quarterly financial statements are prepared. The trial balance and adjusted trial balance on September 30 are shown here.

SALT CREEK GOLF INC.
Trial Balance
September 30, 2017

Unadjusted

Adjusted

Dr.

Cr.

Dr.

Cr.

$41,900

$41,900

$43,645

$43,645

SALT CREEK GOLF INC.
Trial Balance
September 30, 2017

Unadjusted

Adjusted

Dr.

Cr.

Dr.

Cr.

Cash $ 6,340 $ 6,340 Accounts Receivable 530 1,260 Supplies 1,200 400 Prepaid Rent 1,740 870 Equipment 15,500 15,500 Accumulated Depreciation—Equipment $ 310 Notes Payable $ 5,500 5,500 Accounts Payable 2,000 2,000 Salaries and Wages Payable 650 Interest Payable 55 Unearned Rent Revenue 1,430 940 Common Stock 14,400 14,400 Retained Earnings 0 0 Dividends 490 490 Service Revenue 17,400 18,130 Rent Revenue 1,170 1,660 Salaries and Wages Expense 8,990 9,640 Rent Expense 820 1,690 Depreciation Expense 310 Supplies Expense 800 Utilities Expense 6,290 6,290 Interest Expense         55    

$41,900

$41,900

$43,645

$43,645

Explanation / Answer

Answer

---Revenue accounts (having credit balances)
---Expenses accounts (having debit balances)
---Income Summary account (Net Income or Net Loss balance)
---Drawings accounts (having debit balances)
---Dividend account (having debit balances)

Cash

Not Closed

Accounts Receivable

Not Closed

Supplies

Not Closed

Prepaid Rent

Not Closed

Equipment

Not Closed

Accumulated Depreciation—Equipment

Not Closed

Notes Payable

Not Closed

Accounts Payable

Not Closed

Salaries and Wages Payable

Not Closed

Interest Payable

Not Closed

Unearned Rent Revenue

Not Closed

Common Stock

Not Closed

Retained Earnings

Not Closed

Dividends

Closed

Service Revenue

Closed

Rent Revenue

Closed

Salaries and Wages Expense

Closed

Rent Expense

Closed

Depreciation Expense

Closed

Supplies Expense

Closed

Utilities Expense

Closed

Interest Expense

Closed

---In Other words, all accounts that appear on Balance Sheet, either on Asset side, Liabilities section, or on Stockholder’s Equity Section WILL NOT BE CLOSED.

---Accounts to be shown in Income Statement and Dividend account WILL BE CLOSED.

Working

A

Amount of Notes payable

$                          5,500.00

B

Interest rate

12%

C=A x B

12 month Interest will be

$                              660.00

D = C/12 months

Per month Interest expense will be

$                                55.00

---Since Interest payable balance given is $55, which is equal to 1 month Interest (as calculated above), the Notes Payable have been outstanding for ONE month.

Cash

Not Closed

Accounts Receivable

Not Closed

Supplies

Not Closed

Prepaid Rent

Not Closed

Equipment

Not Closed

Accumulated Depreciation—Equipment

Not Closed

Notes Payable

Not Closed

Accounts Payable

Not Closed

Salaries and Wages Payable

Not Closed

Interest Payable

Not Closed

Unearned Rent Revenue

Not Closed

Common Stock

Not Closed

Retained Earnings

Not Closed

Dividends

Closed

Service Revenue

Closed

Rent Revenue

Closed

Salaries and Wages Expense

Closed

Rent Expense

Closed

Depreciation Expense

Closed

Supplies Expense

Closed

Utilities Expense

Closed

Interest Expense

Closed

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