The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.
The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.
The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.
The document provides an adjusted trial balance for Okabe Company as of July 31, 2019. It lists account titles and their debit and credit balances. The instructions are to prepare closing entries for the fiscal year ended July 31, 2019. Closing entries are provided that close revenue and expense accounts to an income summary account, close the income summary to owner's capital, and close owner's drawings. The major steps in completing an accounting cycle are also listed.
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Mishal Mustafa
BTA111 Prof. Wu Exercise Chapter Four 1) Okabe Company ended its fiscal year on July 31, 2019. The company is adjusted trial balance as of the end of its fiscal year is shown below.
Thao Company Income Statement For Year Ended December 31, 2019 Revenues Service Revenues $61,000 Expenses Salaries & Wages Expense $28,000 Advertising Expense $8,400 Supplies Expense $4,000 Depreciation Expense $5,600 Insurance Expense $3,500 Interest Expense $600 Total Expenses $50,100 Net Income $10,900 Owner’s Equity Statement
Thao Company Owner’s Equity Statement For Year Ended December 31, 2019 Owner’s Capital at beginning $13,000 Add: Net Income $10,900 $23,900 Less: Drawings $7,000 Owner’s Capital Dec. 31, 2019 $16,900
Balance Sheet
Thao Company Balance Sheet For Year Ended December 31, 2019 Assets Current Assets Cash $5,300 Accounts Receivable $10,800 Supplies $1,500 Prepaid Insurance $2,000 Total Current Assets $9,600 Property Plant & Equipment Equipment $27,000 Less: Accumulated Depreciation- Equipment $5,600 $21,400 Total Assets $41,000
Liabilities & Stockholder Equity
Current Liabilities Notes Payable $15,000 Accounts Payable $6,100 Salaries & Wages Payable $2,400 Interest Payable $600 Total Current Liabilities $24,100 Stock Holder’s Equity Common Stock $16,900 Total Liabilities and Stockholder’s Equity $41,000
b) Closing Entries
Date Account Titles & Explanation Debit Credit
12/31 Service Revenue $63,000 Income Summary $63,000 (To close revenue accounts)
12/31 Income Summary $50,100
Salaries & Wages Expense $28,000 Advertising Expense $8,400 Supplies Expenses $4,000 Depreciation Expenses $5,600 Insurance Expenses $3,500 Interest Expense $600 (To close expense accounts) 12/31 Income Summary $13,000 Owner’s Capital $13,000 (To close net income)
12/31 Owner’s Capital $6,500
Owner’s Drawings $6,500 (To close drawings) 3) List all major steps in completing an accounting cycle.
The 8 steps involved in completing the accounting cycle are as follows:
1) Analyze business transactions
2) Journalize the transactions 3) Post to ledger accounts 4) Prepare a trial balance 5) Journalize and post adjusting entries 6) Prepare an adjusted trial balance 7) Prepare financial statements 8) Journalize post-closing trial balance
