How do I construct a post-closing trial balance with these figures? What changes
ID: 2432841 • Letter: H
Question
How do I construct a post-closing trial balance with these figures?
What changes occurred in total assets, liabilities, and the owner’s ending capital?
What changes occurred in the Cash and Accounts Receivable accounts?
Has there been an improvement in the firm’s financial position? Why or why not?
Eli's Consulting Services Postclosing Trial Balance December 31, 2019 ACCOUNT NAME DEBIT CREDIT Cash Accounts Receivable Supplies Prepaid Rent Equipment Accumulated Depreciation-Equipment Accounts Pavable Trayton Eli, Capital Totals 11135 0 00 5000 00 1000 00 4000 00 1100 0 00 183 00 35 00 00 128 66 7 00 132 3 5 0 00 1323 5 0 00Explanation / Answer
* Trayton Eli, Capital:
Total assets increased by $ 23,305.
Total liabilities increased by $ 7,000.
Owner's ending capital increased by $ 16,122.
Cash increased by $ 935.
Accounts receivable decreased by $ 530.
Yes, there has been an overall improvement in the firm's financial position. Assets have increased by $ 23,305, while liabilities have increased by only $ 7,000. Therefore, most of the asset increase has been financed by internal accruals.
Also the owner's wealth has increased by $ 28,122 ( gross), and the firm had enough cash to pay out $ 12,000 to the owner. Therefore, the owner's capital increased by a net amount of $ 16,122.
Eli's Consulting Services Post Closing Trial Balance December 31, 2020 Account Titles Debit Credit $ $ Cash 112,285 Accounts Receivable 4,470 Supplies 5,200 Prepaid Rent 0 Prepaid Insurance 7,700 Equipment 26,000 Accumulated Depreciation : Equipment 366 Accounts Payable 10,500 Trayton Eli, Capital * 144,789 Totals 155,655 155,655Related Questions
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