WATSON ANSWERING SERVICE

Worksheet
31 August, 2010
Accounts Title Trial Balance Adjustment Adjusted Trial Income Balance Sheet
Balance Statement
Dr Cr Dr Cr Dr Cr Dr Cr Dr Cr
Cash 5400 5400 5400
Account Receivable 2400 2400 2400
Supplies 2800 1800 1000 1000
Prepaid Insurance 1300 200 1100 1100
Equipment 60000 60000 60000
Notes Payable 40000 40000 40000
Accounts Payable 2400 2400 2400
Capital 30000 30000 30000
Drawings 1000 1000 1000
Service Revenue 4900 4900 4900
Salaries Expense 3200 3200 3200
Utilities Expense 800 800 800
Advertising Expense 400 400 400
Total 77300 77300
Insurance Expense 200 200 200
Supplies Expense 1800 1800 1800
Depreciation Expense 900 900 900
Accumulated Depreciation – 900 900 900
Equipment
Interest Expense 500 500 500
Interest Payable 500 500 500
Total 3400 3400 78500 78500 7800 4900 70900 73800
Net loss 2900 2900
Total 7800 7800 73800 73800
 WATSON ANSWERING SERVICE
General Journal
(Closing Entry)
Date Particulars Re Debit Credit
f
2010
Aug- 31 Service Revenue 4900
Income Summary 4900
(To close the revenue account)
Aug- 31 Income Summary 7800
Salaries Expense 3200
Utilities Expense 800
Advertising Expense 400
Insurance Expense 200
Supplies Expense 1800
Depreciation Expense 900
Interest Expense 500
(To close the expenses account)
Aug- 31 Capital 2900
Income Summary 2900
(For transferring the net loss to capital
account)
Aug- 31 Capital 1000
Drawings 1000
(To close the drawings account)
 General Ledger
Income Summary
Date Particulars Ref Debit Credit Balance
Debit Credit
2010
Aug – 31 4900 4900
“ – 31 7800 2900
“ - 31 2900 -0-
Capital
Date Particulars Ref Debit Credit Balance
Debit Credit
2010
Aug – 31 30000
“ – 31 2900 27100
“ – 31 1000 26100

WATSON ANSWERING SERVICE

Post-Closing Trial Balance
31 August, 2010
Account Title Ref Debit Credit
Cash 5400
Account Receivable 2400
Supplies 1000
Prepaid Insurance 1100
Equipment 60000
Notes Payable 40000
Accounts Payable 2400
Capital 26100
Accumulated Depreciation – Equipment 900
 Interest payable 500
Total 69900 69900
Permanent Account
1) Assets
2) Liabilities
3) OE
Non-Permanent Account
1) Revenues
2) Expenses
3) Drawings/ Dividend
Closing entries
1) to close the revenue account
Revenue
Income summary/ Income Statement

2) to close the expense account

Income summary/ Income Statement
Expense

3) i) For Profit
Income summary/ Income Statement
Capital
Or
ii) For Loss
Capital
Income summary/ Income Statement
4) To close the drawings account
Capital
Drawings