Answer:
Dylan Delivery Company
1. 10-Column Worksheet (see attachment)
2. Closing Journal Entries at December 31, 2010:
Date Description Debit Credit
Depreciation expense - Truck 80,000
Salaries Expense 111,000
Office supplies expense 18,000
Repairs expense- trucks 15,000
Income Summary 224,000
To close expenses to the Income Summary.
Date Description Debit Credit
Income Summary 263,000
Delivery fees 263,000
To close revenue to the Income Summary.
Date Description Debit Credit
Net Income 39,000
Retained Earnings 39,000
To close the net income to retained earnings.
2b) Capital to be reported on balance sheet as at December 31, 2010:
S. Dylan Capital $307,000
Retained Earnings 39,000
S. Dylan withdrawals (34,000)
Net Capital $312,000
Explanation:
a) A 10-column worksheet is a tool used by accountants to close the temporary accounts, after necessary adjustments, and then extract a balance sheet. It comprises two columns (debit and credit) for each of the following: Unadjusted Trial Balance, Adjusting Entries, Adjusted Trial Balance, Income Statement, and Balance Sheet.
b) A closing entry is a journal entry that is made at the end of an accounting period to transfer balances from a temporary account to a permanent account. The four basic steps in the closing process are: Closing the revenue accounts—transferring the credit balances in the revenue accounts to a clearing account called Income Summary. Closing the expense accounts—transferring the debit balances in the expense accounts to a clearing account called Income Summary. Extracting a balance between the revenue accounts and the expense accounts, called the net income or loss. Closing the net income or loss to the Retained Earnings.
