Question

The following adjusted trial balance contains the accounts and balances of Cruz Company as of December 31 2017, the end of its fiscal year:
No. Account Title Debit Credit
101 Cash $ 18,000
126 Supplies 14,500
128 Prepaid insurance 2,000
167 Equipment 23,000
168 Accumulated depreciation—Equipment $ 6,500
307 Common stock 13,272
318 Retained earnings 33,600
319 Dividends 6,000
404 Services revenue 44,100
612 Depreciation expense—Equipment 2,000
622 Salaries expense 25,710
637 Insurance expense 1,852
640 Rent expense 2,955
652 Supplies expense 1,455
Totals $ 97,472 $ 97,472
Required:
1. Prepare the December 31, 2017, closing entries for Cruz Company.
2. Prepare the December 31, 2017, post-closing trial balance for Cruz Company.

Answer 1

Answer:

1. Prepare the December 31, 2017, closing entries for Cruz Company.

                                                              Dr.      Cr.

404 Services revenue                      44,100

Income Summary                                          44,100

Income Summary                              33,972

612 Depreciation expense—Equipment      2,000

622 Salaries expense                                   25,710

637 Insurance expense                                1,852

640 Rent expense                                        2,955

652 Supplies expense                                  1,455

2. Prepare the December 31, 2017, post-closing trial balance for Cruz Company.

                                                                            Dr.            Cr.

101 Cash                                                           18,000

126 Supplies                                                    14,500

128 Prepaid insurance                                     2,000

167 Equipment                                                 23,000

168 Accumulated depreciation—Equipment                  6,500

307 Common stock                                                         13,272

318 Retained earnings                                                     33,600

319 Dividends                                                 6,000

404 Services revenue                                                      44,100

612 Depreciation expense—Equipment        2,000

622 Salaries expense                                     25,710

637 Insurance expense                                  1,852

640 Rent expense                                           2,955

652 Supplies expense                                   1,455                    

Totals                                                                97,472     97,472

Explanation: