1. Preparation an income statement for the year ended June
Last Chance Company Income Statement
Revenue
Fees Earned $283,750
Rent Revenue $3,000
Total Revenue $286,750
($283,750+$3,000)
Expenses
Salaries & Wages Expense $147,000
Advertising Expense $86,800
Utilities Expense $30,000
Travel Expense $18,750
Depr. Exp.—Equipment $4,550
Depr. Exp.—Building $3,000
Supplies Expense $1,500
Insurance Expense $1,300
Misc. Expense $5,875
Total Expenses $298,775
Net (Loss) $(12,025)
($286,750-$298,775)
2. Preparation of a statement of owner's equity for the year ended June 30.
Last Chance Company Statement of Owner's Equity
Beginning Balance, Capital $361,300
Add Net Income ($12,025)
$349,275
Less Drawings $20,000
Ending Balance, Capital $329,275
($361,300-$20,000)
3. Preparation of a balance sheet as of June 30.
Last Chance Company Balance Sheet
Assets
Current Assets
Cash $5,100
Accounts Receivable $26,500
Prepaid Insurance $2,300
Supplies $525
Total Current Assets $34,425
Property Plant and Equipment
Land $80,000
Building $340,000
Accum. Depreciation—Building $ (193,000)
Equipment $140,000
Accum. Depr.—Equipment $ (59,000)
Total Property Plant and Equipment $308,000
Total Assets $ 342,425
($34,425+$308,000)
Liabilities & Owner's Equity
Current Liabilities
Accounts Payable $9,750
Salaries & Wages Payable $1,900
Unearned Rent $1,500
Total Current Liabilities $13,150
Owner's Equity
Tami Garrigan, Capital $329,275
Total Owner's Equity $ 329,275
Total Liabilities & Owner's Equity $ 342,425
($13,150+$ 329,275)
4. Preparation of the closing entries
Dr Fees Earned $283,750
Dr Rent Revenue $3,000
Cr Tami Garrigan, Capital $ 286,750
Dr Tami Garrigan, Capital $298,775
Cr Salaries & Wages Expense $147,000
Cr Advertising Expense $86,800
Cr Utilities Expense $30,000
Cr Travel Expense $18,750
Cr Depr. Expense—Equipment $4,550
Cr Depr. Expense—Building $3,000
Cr Supplies Expense $ 1,500
Cr Insurance Expense $ 1,300
Cr Misc. Expense $5,875
Cr Tami Garrigan, Capital $ 20,000
Cr Tami Garrigan, Drawing $ 20,000
5. Preparation of a post-closing trial balance
Post Closing Trial
Debit side
Cash $5,100
Accounts Receivable $26,500
Prepaid Insurance $2,300
Supplies $525
Land $80,000
Building $340,000
Equipment $ 140,000
Total Debit side $594,425
Credit side
Accum. Depreciation—Building $193,000
Accum. Depreciation—Equipment $59,000
Accounts Payable $9,750
Salaries & Wages Payable $1,900
Unearned Rent $1,500
Tami Garrigan, Capital $329,275
Total Credit side $594,425
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