Answer:
Foxy Investigative Services
1. Foxy Investigative Services
A. Income Statement
For the Year Ended November 30, 20Y8
REVENUE
Service Fees $675,500
Rent Revenue 9,000
Total revenues $684,500
EXPENSES
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
Total expenses $539,000
Net income $ 145,500
Retained Earnings 70,300
Dividends -30,000
Balance, November 30, 20Y8 $185,800
Foxy Investigative Services
B. Statement of Shareholders' Equity
November 30, 20Y8
Common Stock $40,000
Net income $ 145,500
Retained Earnings 70,300
Dividends -30,000
Balance, November 30, 20Y8 $185,800
Total stockholders' equity $225,800
Foxy Investigative Services
C. Balance Sheet
November 30, 20Y8
ASSETS
Current assets
Cash 27,500
Accounts Receivable 71,800
Supplies 5,550
Prepaid Insurance 750
Total Current Assets $105,600
Building 330,500
Accumulated Depreciation -184,100
Total property, plant, and equipment $146,400
Total assets $252,000
LIABILITIES
Current liabilities
Accounts Payable 16,100
Salaries Payable 6,600
Unearned Rent 1,500
Total Liabilities $24,200
EQUITY
Common Stock 40,000
Retained Earnings 185,800
Total stockholders' equity $225,800
Total liabilities and stockholders' equity $250,000
NB: Liabilities + Equity side is short by $2,000 because the Trial Balance is not in balance.
2. Closing Journal Entries:
Account Title Dr. Cr.
Income Summary 30,000
Dividends 30,000
To close dividends to the income summary (Retained Earnings)
Account Title Dr. Cr.
Service Fees 675,500
Rent Revenue 9,000
Income Summary 684,500
To close revenues to the income summary.
Account Title Dr. Cr.
Income Summary $539,000
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
To close the expenses to the income summary.
3. Net Income remained $ 145,500. Retained Earnings, beginning balance would have been reduced by $46,000.
Explanation:
a) Data and Calculations:
Foxy Investigative Services
End-of-Period Spreadsheet
For the Year Ended November 30, 20Y8
Adjusted Trial Balance
Account Title Dr. Cr.
Cash 27,500
Accounts Receivable 71,800
Supplies 5,550
Prepaid Insurance 750
Building 330,500
Accumulated Depreciation-Building 184,100
Accounts Payable 16,100
Salaries Payable 6,600
Unearned Rent 1,500
Common Stock 40,000
Retained Earnings 70,300
Dividends 30,000
Service Fees 675,500
Rent Revenue 9,000
Salaries Expense 435,000
Rent Expense 55,000
Supplies Expense 11,850
Depreciation Expense-Building 10,000
Utilities Expense 8,800
Repairs Expense 4,250
Insurance Expense 3,000
Miscellaneous Expense 11,100
Totals 1,003,100 1,003,100
Correct total of Debit side = 1,005,100 2,000