Answer:
1. Journalize the closing entries at April 30.
April 30, revenue closing entry
Dr Service Revenue 15,500
Cr income summary 15,500
April 30, expenses closing entry
Dr Income summary 12,450
Cr Salaries and Wages Expense 11,000
Cr Rent Expense 800
Cr Depreciation Expense 600
Cr Interest Expense 50
2. Post the closing entries to Income Summary and Retained Earnings.
April 30, income summary closing entry
Dr Income summary 3,050
Cr Retained earnings 3,050
April 30, dividends closing entry
Dr Retained earnings 3,850
Cr Dividends 3,850
3. Prepare a post-closing trial balance at April 30.
Assets:
Cash $10,000
Accounts Receivable $7,780
Prepaid Rent $2,320
Equipment $22,850
Accumulated Depreciation--Equip. ($4,500)
Total assets: $38,450
Liabilities and stockholders' equity:
Accounts Payable $4,500
Interest Payable $50
Notes Payable $5,900
Common Stock $20,250
Retained Earnings $7,750
Total liabilities and stockholders' equity: $38,450
retained earnings = $8,550 - $3,850 + $3,050 = $7,750
