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3 years ago

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31.

Business

1 answer:

vova2212 [387]3 years ago

5 0

Answer:

CRUZ COMPANY

1. Closing Entries:

No. Account Title Debit Credit

901 Income Summary $33,100

612 Depreciation expense

—Equipment $3,000

622 Salaries expense 22,000

637 Insurance expense 2,500

640 Rent expense 3,400

652 Supplies expense 2,200

To close expenses to the Income Summary.

404 Services revenue $44,000

901 Income Summary $44,000

To close Service Revenue to the Income Summary.

318 Retained earnings $37,600

901 Income Summary (Retained Earnings) $37,600

To close the Retained Earnings of prior year to Retained Earnings section of the Income Summary.

901 Income Summary

(Retained Earnings) $7,000

319 Dividends $7,000

To close the Dividends to the Retained Earnings section of the Income Summary.

2. CRUZ COMPANY

Post-Closing Trial Balance

As of December 31

No. Account Title Debit Credit

101 Cash $ 19,000

126 Supplies 13,000

128 Prepaid insurance 3,000

167 Equipment 24,000

168 Accumulated depreciation

—Equipment $ 7,500

307 Common stock 10,000

318 Retained earnings 41,500

Totals $ 59,000 $ 59,000

Explanation:

a) Data and Calculations:

CRUZ COMPANY

Trial Balance

As of December 31

No. Account Title Debit Credit

101 Cash $ 19,000

126 Supplies 13,000

128 Prepaid insurance 3,000

167 Equipment 24,000

168 Accumulated depreciation

—Equipment $ 7,500

307 Common stock 10,000

318 Retained earnings 37,600

319 Dividends 7,000

404 Services revenue 44,000

612 Depreciation expense

—Equipment 3,000

622 Salaries expense 22,000

637 Insurance expense 2,500

640 Rent expense 3,400

652 Supplies expense 2,200

Totals $ 99,100 $ 99,100

b) Income Summary for the year ended December 31:

Revenue $44,000

Expenses (33,100)

Net Income $10,900

Retained Earnings 37,600

Dividends (7,000)

Retained Earnings $41,500

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