The unadjusted trial balance of PS Music as of July 31, 2016, along with the adj
ID: 2480117 • Letter: T
Question
The unadjusted trial balance of PS Music as of July 31, 2016, along with the adjustment data for the two months ended July 31, 2016, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared: PS Music
ADJUSTED TRIAL BALANCE July 31, 2016
ACCOUNT TITLE DEBIT CREDIT
1 Cash 9,945.00
2 Accounts Receivable 4,150.00
3 Supplies 275.00
4 Prepaid Insurance 2,475.00
5 Office Equipment 7,500.00
6 Accumulated Depreciation-Office Equipment 50.00
7 Accounts Payable 8,350.00
8 Wages Payable 140.00
9 Unearned Revenue 3,600.00
10 Common Stock 9,000.00
11 Retained Earnings
12 Dividends 1,750.00
13 Income Summary
14 Fees Earned 21,200.00
15 Wages Expense 2,940.00
16 Office Rent Expense 2,550.00
17 Equipment Rent Expense 1,375.00
18 Utilities Expense 1,215.00
19 Music Expense 3,610.00
20 Advertising Expense 1,500.00
21 Supplies Expense 925.00
22 Insurance Expense 225.00
23 Depreciation Expense 50.00
24 Miscellaneous Expense 1,855.00
25 Totals 42,340.00 42,340.00
Required: 1. (Optional) Using the data from Chapter 3, prepare an end-of-period spreadsheet on a sheet of paper or using spreadsheet software.
2. Prepare an income statement, a retained earnings statement, and a balance sheet.*
3. A. Journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles. B. Post the closing entries. The income summary account is #34 in the ledger of PS Music. Indicate closed accounts by inserting a 0 (zero) in either of the Balance columns opposite the closing entry. No entry is required in the Item column.
4. Prepare a post-closing trial balance. * For guidance in completing the financial statements, be sure to read the instructions above each statement carefully.
Explanation / Answer
Adjusted Trial Balance Post Closing Trial Balance Accounts Title Dr Cr Dr Cr 1 Cash $9,945 9945 2 Accounts Receivable 4150 4150 3 Supplies 275 275 4 Prepaid Insurance 2475 2475 5 Office Equipment 7500 7500 6 Accumulated Depreciation-Office Equipment 50 50 7 Accounts Payable 8350 8350 8 Wages Payable 140 140 9 Unearned Revenue 3600 3600 10 Common Stock 9000 9000 11 Retained Earnings 3205 12 Dividends 1750 0 13 Income Summary 14 Fees Earned 21200 0 15 Wages Expense 2940 0 16 Office Rent Expense 2550 0 17 Equipment Rent Expense 1375 0 18 Utilities Expense 1215 0 19 Music Expense 3610 0 20 Advertising Expense 1500 0 21 Supplies Expense 925 0 22 Insurance Expense 225 0 23 Depreciation Expense 50 0 24 Miscellaneous Expense 1855 0 25 Totals 42340 42340 24345 24345 Income Statement As on July 31,2016 14 Fees Earned 21200 Less: OperatingExpenses 15 Wages Expense 2940 16 Office Rent Expense 2550 17 Equipment Rent Expense 1375 18 Utilities Expense 1215 19 Music Expense 3610 20 Advertising Expense 1500 21 Supplies Expense 925 22 Insurance Expense 225 23 Depreciation Expense 50 24 Miscellaneous Expense 1855 Total operating Expenses 16245 Net Income 4955 Statement Of Retained earnings Net Income 4955 Less: dividends 1750 Ending balance of Retained earnings 3205 Balance Sheet As on 31 July,2016 Assets Amount $ Current Assets 1 Cash 9945 2 Accounts Receivable 4150 3 Supplies 275 4 Prepaid Insurance 2475 Total Current assets 16845 Fixed Assets 5 Office Equipment 7500 Less: 6 Accumulated Depreciation-Office Equipment -50 7450 Total assets 24295 Liabilties & Stockholder Equity Current Liabilities 7 Accounts Payable 8350 8 Wages Payable 140 9 Unearned Revenue 3600 Total Current Liabilities 12090 10 Common Stock 9000 11 Retained Earnings 3205 Total stockholder Equity 12205 Total liabilities & Stockholder Equity 24295 Accounts title 14 Fees Earned 21200 13 Income Summary 21200 (Being revenue closed to Income Summary) 34 Income summary 16245 15 Wages Expense 2940 16 Office Rent Expense 2550 17 Equipment Rent Expense 1375 18 Utilities Expense 1215 19 Music Expense 3610 20 Advertising Expense 1500 21 Supplies Expense 925 22 Insurance Expense 225 23 Depreciation Expense 50 24 Miscellaneous Expense 1855 (Expenses close to Income Summary) 34 Income summary 4955 Retained Earnings 4955 (Income summary transferred to retained earnings) 11 Retained Earnings 1750 12 Dividend 1750 (Dividend transferred to retained earnings) Post Closing Trial balance As on 31 December 2016 Accounts Title Dr Cr 1 Cash 9945 2 Accounts Receivable 4150 3 Supplies 275 4 Prepaid Insurance 2475 5 Office Equipment 7500 6 Accumulated Depreciation-Office Equipment 50 7 Accounts Payable 8350 8 Wages Payable 140 9 Unearned Revenue 3600 10 Common Stock 9000 11 Retained Earnings 3205 Total $24345 24345
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