Accounting 20
Module 4
Lesson 18
Accounting 20
1
Lesson 18
Accounting 20
2
Lesson 18
Lesson 18 - Completing the Accounting
Cycle
Study pages 692 to 735 in the textbook. Omit topics 4 and 5.
Topics:
•
•
•
•
•
•
•
•
•
Introduction
Preparing the Ten-Column Worksheet
Preparing Financial Statements
Completing the Accounting Cycle
Remember These Important Points
Do You Understand?
Self Test
Answers for Self Test
Assignment 18
After studying lesson 18, the student should be able to
•
complete a ten-column worksheet when provided with an accurate trial balance and
adjustment information.
•
prepare a Schedule of Cost of Goods Sold, a condensed income statement, and a
statement of owner’s equity.
•
prepare a multi-step classified income statement and a classified balance sheet.
•
journalize and post all needed adjustment entries and closing entries for a
merchandising business.
•
prepare a postclosing trial balance for a business.
Accounting 20
3
Lesson 18
Introduction
In lesson 3 you studied the ten-column worksheet and in this lesson, you will review this
worksheet. Lesson 17 reviewed adjusting entries and financial statements were prepared.
Preparing the Ten-Column Worksheet
Study thoroughly pages 691 to 706 in the textbook. The steps are reviewed as follows:
Step 1 - Completing the Trial Balance Section
The first step is to copy the period-end trial balance onto the worksheet.
Step 2 - Completing the Adjustments Section
Adjustments for the several accounts are made on the worksheet before adjusting entries
can be journalized and posted. These are reviewed on pages 695 to 698 in the textbook.
Step 3 - Completing the Adjusted Trial Balance Section
The next step is to calculate the adjusted trial balance figures. The accounts that are not
adjusted are transferred directly from the trial balance. The accounts which were
adjusted--such as Interest Receivable--must have their balances calculated. The total is
then extended to the Adjusted Trial Balance section.
Step 4 - Moving the Adjusted Trial Balance Amounts Into the Statement Columns
Each account balance in the Adjusted Trial Balance section must be copied to either the
debit or credit column of its related statement section. A debit is moved to a debit column
of the appropriate statement. A credit is moved to a credit column of the appropriate
section.
Accounting 20
4
Lesson 18
Assets, liabilities, and owner's equity accounts must be moved to the Balance Sheet
columns. Revenue, contra revenue, costs expense and contra expense accounts must be
moved to the Income Statement columns.
In a merchandising business using periodic inventory, the cost of each good sold is not
calculated as each sale is made. Therefore, no account called Cost of Goods Sold is found
in a worksheet. Instead, a group of costs is used to make an indirect calculation of the
Cost of goods Sold. The chart on page 701 of the text shows how each of these accounts is
identified on the worksheet.
•
Beginning inventory with a debit balance is shown in the Adjusted Trial Balance
section. This account is part of the cost of goods sold section in the income
statement. Therefore, the debit is extended to the Income Statement section of the
worksheet. Cost of goods sold decreases the owner's equity and is therefore a debit.
•
Purchases, as a debit in the Adjusted Trial Balance, is extended to the debit side of
the Income Statement section where it is part of cost of goods sold. Cost of goods
sold decreases the owner's equity and is therefore a debit.
•
Transportation-in is directly related to Purchases. Therefore it too is extended to
the debit side of the Income Statement section.
•
Purchases Returns and Allowances and Purchases Discounts are both contra
accounts to Purchases. Therefore, each has a credit balance. Since they decrease
the cost of goods sold, each is extended to the credit side of the Income Statement
section of the worksheet.
•
At the end of the accounting period, a physical count is taken of the goods on hand-in other words, ending inventory is $4 000. Since it is an asset, it must appear on
the debit side of the Balance Sheet section of the worksheet. This information is
needed for the calculation of cost of goods sold. Since it decreases the cost of goods
sold, it is entered as a credit in the Income Statement section.
Step 5 - Calculating the Net Income (or Loss) and Completing the Worksheet
Follow the instructions on page 706 in the textbook for totalling the statements and the
completion of the worksheet. Remember that a net income exists if the credit total in the
income statement columns is larger than the debit total. A net loss exists if the debit total
is larger than the credit total.
Accounting 20
5
Lesson 18
Preparing Financial Statements
Study thoroughly pages 712 to 723 in the textbook.
Preparing the Income Statement
The income statement is prepared from the income statement sections of the worksheet
and it calculates the net income or loss which is necessary to complete the balance sheet.
Comparing Multiple-Step to Single-Step Income Statements
The main advantage of the single-step statement (as shown on page 716 of the text) is its
simplicity. The disadvantage is its lack of reporting detail. As an example, all sources of
revenue are reported under one heading. Study pages 714 and 715 in the textbook to see
how an income statement is prepared from the worksheet.
When a single-step statement is used, some businesses prefer only a total figure of Cost of
Goods Sold. A separate Schedule of Cost of Goods Sold is prepared. (This is shown on
page 716.) Page 717 shows the separate Schedule and the resulting Condensed Income
Statement.
Illustrating the Classified Income Statement
The single-step income statement recorded all expenses under the heading Expenses. A
more detailed breakdown of the business operating expenses is required by larger
businesses so that business decisions can be made. These may be categorized as follows:
Selling Expenses
These operating expenses include expenses directly or indirectly related to the selling
function.
More specifics are found on page 719 in the textbook.
Accounting 20
6
Lesson 18
General and Administrative Expenses
This classification includes expenses involving non-selling aspects of the business. These
expenses involve the general office, accounting, and personnel in those offices.
More specifics are found on pages 719 and 720 of the textbook.
Income from Operations
This section attempts to match revenues from operations with the expenses from the
operations. Other sources of revenue and expense is to be reported in its own section after
Income from Operations.
Illustrating a Condensed Income Statement
In the example on page 717 of the textbook, note that a separate Schedule of Cost of
Goods Sold is prepared. The final figure is then inserted in the Condensed Income
Statement. Note also that total figures for Sales, Operating Expenses, Other Revenues,
and Other Expenses are inserted. The details have been omitted. These figures may be
found from the General Ledger.
More specifics are found on page 720 in the textbook.
For the purposes of this course, you will be responsible for the Multiple-Step Classified
Income Statement and the separate Cost of Goods Sold Statement. (Shown on pages 717
and 718.)
Preparing the Balance Sheet
Study page 721 in the textbook. Pay particular attention to the information given on
“mortgage payable.”
Preparing the Statement of Owner's Equity
When this statement is prepared, only the final Capital amount is then placed in the
balance sheet.
More specific details are found on pages 721 and 723 in the textbook.
Accounting 20
7
Lesson 18
Completing the Accounting Cycle
The last three steps of the accounting cycle will be discussed--making adjusting entries,
closing entries, and preparing a postclosing trial balance.
Making Adjusting Entries
In the first section of this lesson, we calculated adjustments in the ten-column worksheet.
From this worksheet, financial statements were prepared. To make the General Ledger
accounts current, we must enter adjustments in the General Journal. These entries would
then be posted to the General Ledger.
From the worksheet adjustment section on page 697 of the text, the adjusting entries are
then journalized. Note that the post. ref. column has been filled in, (page 697), assuming
that these entries have been posted to ledger accounts.
Making Closing Entries
Closing the ledger at the end of the accounting year is required in order to reduce all
revenue, expense, and the owner's drawing account to zero. This clears them of any
financial data for the next financial period. This procedure also brings the owner's capital
account in the General Ledger into agreement with the balance as reported on the yearend balance sheet. To close the ledger, a clearinghouse account called Revenue and
Expense Summary (R & E Summary) is used.
The summary of pages 727 to 735 in the textbook follows:
•
Transfer the revenue account(s) balances to R & E Summary by debiting revenue
and crediting R & E Summary.
•
Transfer the contra revenue accounts by debiting R & E Summary and crediting
Sales Returns and Sales Discounts.
•
Transfer beginning inventory by debiting R & E Summary and crediting the
Merchandise Inventory account. This causes the Inventory account to equal zero,
thus closing the account.
•
Establish or reopen the ending inventory account by debiting Merchandise
Inventory and crediting R & E Summary.
Accounting 20
8
Lesson 18
•
To close Purchases and Transportation-in, Debit R & E Summary and credit these
two accounts.
•
Debit the contra purchases accounts--Purchases Returns and Purchases Discount;
to bring this balance to zero R & E Summary is credited.
•
Transfer the debit balances of all expense accounts by debiting R & E Summary and
crediting expense accounts.
•
Transfer the debit balance (net loss) or credit balance (net income) from R & E
Summary to the owner's Capital account. If a net loss, Capital is debited and R & E
Summary is credited. If a net income, R & E Summary is debited and Capital is
credited.
•
Transfer the balance of owner's Drawings (bring to a zero balance) to the Capital
account. To do this, Capital would be debited and Drawings would be credited. The
capital account now reflects the true owner's claim on assets at the end of the
period. This figure must agree with the Owner's Equity in the Balance Sheet.
Preparing the Postclosing Trial Balance
This statement checks on three things:
•
That debits and credits are equal
•
That only the permanent accounts (balance sheet accounts) have year-end balances.
These are the only accounts listed in the Postclosing Trial Balance.
The temporary accounts have zero balances; therefore, they are not listed.
•
That the Owner's Capital account balance agrees with the total of Owner's Equity
in the balance sheet.
The accounts in the Postclosing trial balance are identical to the accounts in the balance
sheet with one exception. The Drawing account is needed on the balance sheet for
reporting purposes.
Accounting 20
9
Lesson 18
Remember These Important Points
•
The steps in preparing the ten-column worksheet are:
Step 1 - completing the trial balance section
Step 2 - completing the adjustments section
Step 3 - completing the adjusted trial balance section
Step 4 - moving the adjusted trial balance amounts into the statement columns
Step 5 - calculating the net income (or loss) and completing the
worksheet
•
In step 4, you calculated Cost of Goods Sold.
Beginning inventory, Purchases and Transportation-in are shown in the Adjusted
Trial Balance section as debit balances. These accounts must be copied to the debit
column of the Income Statement section.
Purchases Returns and Allowances and Purchases Discounts are both contra
accounts to Purchases. They have credit balances in the Adjusted Trial Balance
section. These must be copied to the credit column of the Income Statement section.
Ending inventory must be established by entering it on the debit side of the Balance
Sheet section. Ending inventory is also entered as a credit in the Income Statement
section since it decreases the cost of goods sold.
•
From the worksheet, we prepared the income statement from the Income Statement
section. Be able to prepare either a single-step Income Statement or a multiple-step
classified income statement.
•
From the Balance Sheet section of the worksheet, be able to prepare a classified
balance sheet and a statement of owner's equity.
•
To complete the accounting cycle, adjusting entries and closing entries must be
prepared in the general journal. They are then posted to the general ledger. Note
how new accounts are handled.
•
The last step is to prepare a postclosing trial balance.
Accounting 20
10
Lesson 18
Do You Understand?
Worksheet - an expanded trial balance for computing, classifying and sorting account
balances before preparing financial statements.
Gross margin - the difference between net sales and cost of goods sold.
Selling expenses - one class of operating expenses related directly or indirectly to the
selling function of the business.
General and administrative expenses - a large class of operating expenses related to the
non-selling aspects of the business.
Budgeting - a co-ordinated plan to estimate the future transactions covering a planned
period of time.
Income from operations - the excess of matching revenues and expenses that are related
to the main operations of the business.
Accounting 20
11
Lesson 18
Self Test
1.
P 16-2, page 708 of the text
2.
MC 16-2, page 711 of the text
3.
P 16-5, page 724 of the text
In part (b) prepare a classified income statement. The firm
splits common costs in a 60:40 ratio (Selling to General
Administration). Use the single cost of goods sold figure you
have generated.
In part (c) prepare a classified balance sheet in report form.
4.
Accounting 20
P 16-8, page 736 of the text
12
Lesson 18
Regina Rugs Worksheet
Accounting 20
13
Lesson 18
P 16-2
Acct.
No.
Account Title
Accounting 20
14
Trial Balance
Debit
Credit
Adjust
Debit
Lesson 18
ments
Credit
P 16-2 (continued)
ments
Credit
Accounting 20
Adjusted Trial Balance
Debit
Credit
I ncome Statement
Debit
Credit
15
Balance Sheet
Debit
Credit
Lesson 18
P 16-5a
Extra Form
Accounting 20
16
Lesson 18
P 16-5b
Accounting 20
17
Lesson 18
P 16-5c
Accounting 20
18
Lesson 18
P 16-8a
Date
20__
19__
Accounting 20
General Journal
Ac c o u n t Ti t le a n d E x p la n a t i o n
19
P ost
R e f.
Page
De bit
Cre d i t
Lesson 18
P 16-8a (continued)
Date
20__
19__
Accounting 20
General Journal
Ac c o u n t Ti t le a n d E x p la n a t i o n
20
P ost
R e f.
Page
De bit
Cre d i t
Lesson 18
P 16-8b, d
Accounting 20
21
Lesson 18
P 16-8c
Date
20__
19__
Accounting 20
General Journal
Ac c o u n t Ti t le a n d E x p la n a t i o n
22
P ost
R e f.
Page
De bit
Cre d i t
Lesson 18
P 16-8e
Ac c t.
No.
Ac c o u n t Ti tle
Accounting 20
23
D e bi t
Cre d i t
Lesson 18
Answers for Self Test
Ac c o u n t Title
P 16-2
Ac c t.
No.
Tria l B a la n c e
D e bit
Cre d it
Ad ju s tm e n ts
D e bit
Cre d it
01 Cash
101
5 5 0 0 00
02 Accou n ts R eceivable
105
8 0 0 0 00
03 Allow an ce for B ad Debts
106
04 In ven tory J an u ary 1, 19-4
110
12 5 0 0 00
05 Office S u pplies
115
1 2 0 0 00
(C) 1 2 0 0 00
06 Prepaid In su ran ce
120
2 7 0 0 00
(B ) 2 4 5 0 00
07 L an d
150
12 0 0 0 00
08 B u ild in g
160
53 0 0 0 00
09 Accu m u lated Depreciation / B u ild .
161
10 T ru ck s
165
11 Accu m u lated Depreciation / T ru ck
166
12 Office E qu ipm en t
171
13 Accu m u lated Depreciation / E qu ip.
172
2 8 0 0 00
14 B an k L oan Payable
210
11 0 0 0 00
15 Accou n ts Payable
212
2 9 0 0 00
16 Un earn ed R even u e
215
1 8 0 0 00 (A)1 6 5 0 00
17 Property T axes Payable
220
1 4 0 0 00
18 P. M atth ew s, Capital
301
88 1 6 0 00
19 P. M atth ew s, Draw in g
302
20 Carpet S ales
410
21 S ales R etu rn s & Allow an ces
411
5 0 0 00
22 S ales Discou n ts
412
2 3 0 0 00
23 In stallation Fees E arn ed
420
24 Pu rch ases
501
62 0 0 0 00
25 T ran sportation -in
502
5 8 0 0 00
26 Pu rch ases R etu rn s & Allow an ces
503
3 0 0 00
27 Pu rch ases Discou n ts
504
4 1 0 0 00
28 Wages E xpen se
508
18 9 0 0 00
29 S u pplies E xpen se
520
4 0 0 00
30 T eleph on e E xpen se
525
31
(J )
8 0 00 (G)
5 0 00
4 0 00 (G)
5 0 00 (H )
1 0 0 00
2 8 0 0 00
Ad ju s te d Tria l B a la n c e
D e bit
(D) 2 0 0 0 00
25 0 0 0 00
(E ) 5 0 0 0 00
1 5 0 0 00
6 0 0 0 00
(F)
5 0 0 00
1 1 0 0 00
76 0 0 0 00
(A) 1 1 0 0 00
25 5 0 0 00
(K)
(J )
8 0 00
(A)
5 5 0 00
(I)
5 5 0 00
(K)
2 6 0 00
2 6 0 00
(C)1 2 0 0 00
1 4 0 0 00
218 3 0 0 00 218 3 0 0 00
32 In su ran ce E xpen se
526
(B )2 4 5 0 00
33 Depreciation E xpen se/ B u ild in g
527
(D)2 0 0 0 00
34 Depreciation E xpen se/ T ru ck
528
(E )5 0 0 0 00
35 Depreciation E xpen se/ E qu ipm en t
529
(F)
5 0 0 00
36 B ad Debts E xpen se
530
(H )
1 0 0 00
37 B an k L oan In terest E xpen se
531
(I)
5 5 0 00
38 B an k L oan In terest Payable
223
39 Wages Payable
224
40
13 8 4 0 00
13 8 4 0 00
41
42 N E T IN COM E
43
44
Accounting 20
24
Lesson 18
P 16-2 (continued)
Ad ju s te d Tria l B a la n c e
D e bit
Cre d it
In c o m e S ta te m e n t
D e bit
Cre d it
5 5 0 0 00
B a la n c e S h e e t
D e bit
Cre d it
5 5 0 0 00
8 0 3 0 00
8 0 3 0 00
9 0 00
12 5 0 0 00
01
02
9 0 00 03
12 5 0 0 00
11 9 5 0 00
11 9 5 0 00
0
04
05
2 5 0 00
2 5 0 00
06
12 0 0 0 00
12 0 0 0 00
07
53 0 0 0 00
53 0 0 0 00
08
4 8 0 0 00
4 8 0 0 00 09
25 0 0 0 00
25 0 0 0 00
6 5 0 0 00
10
6 5 0 0 00 11
6 0 0 0 00
6 0 0 0 00
12
3 3 0 0 00
3 3 0 0 00 13
11 0 0 0 00
11 0 0 0 00 14
2 9 0 0 00
2 9 0 0 00 15
1 5 0 00
1 5 0 00 16
1 4 0 0 00
1 4 0 0 00 17
88 1 6 0 00
88 1 6 0 00 18
1 1 0 0 00
1 1 0 0 00
77 1 0 0 00
77 1 0 0 00
19
20
5 0 0 00
5 0 0 00
21
2 3 0 0 00
2 3 0 0 00
22
26 1 3 0 00
62 0 0 0 00
26 1 3 0 00
23
62 0 0 0 00
5 8 0 0 00
24
5 8 0 0 00
25
3 0 0 00
3 0 0 00
26
4 1 0 0 00
4 1 0 0 00
27
19 1 6 0 00
19 1 6 0 00
28
1 6 0 0 00
1 6 0 0 00
29
1 4 0 0 00
1 4 0 0 00
30
31
2 4 5 0 00
2 4 5 0 00
32
2 0 0 0 00
2 0 0 0 00
33
5 0 0 0 00
5 0 0 0 00
34
5 0 0 00
5 0 0 00
35
1 0 0 00
1 0 0 00
36
5 5 0 00
5 5 0 00
37
5 5 0 00
5 5 0 00 38
2 6 0 00
226 7 4 0 00
2 6 0 00 39
226 7 4 0 00 115 8 6 0 00 119 5 8 0 00
122 8 3 0 00 119 1 1 0 00 40
115 8 6 0 00
41
3 7 2 0 00
3 7 2 0 00 42
122 8 3 0 00 43
44
Accounting 20
25
Lesson 18
P 16-2a
Regina Rugs
Schedule of Cost of Goods Sold
For the Year Ended December 31, 20__
Merchandise Inventory, Jan. 1, 20__
Purchases
Transportation-in
Cost of Delivered Goods
Purchases Returns & Allowances
Purchases Discounts
Net Purchases
Cost of Goods Available for Sale
Less: Merchandise Inv. Dec. 31, 20__
Cost of Goods Sold
$ 12 500.00
$62 000.00
5 800.00
67 800.00
$ 300.00
4 100.00
4 400.00
63 400.00
75 900.00
11 950.00
$63 950.00
MC 16-2a
The income statement columns will only balance if revenues equal expenses, that is, if there is no net
income. If credits are larger than debits, then there will be a net income; if debits are larger than credits,
there will be a net loss. In summary, most of the time, the income statement columns will not balance, since
rarely does revenue exactly equal expenses.
Accounting 20
26
Lesson 18
P 16-5b
Regina Rugs
Income Statement
For the Year Ended December 31, 20__
Revenue:
Gross Sales
$77 100.00
Sales Returns & Allowances
$ 5 000.00
Sales Discounts
2 300.00
Net Sales
2 800.00
74 300.00
Cost of Goods Sold (See Schedule)
63 950.00
Gross Margin From Sales
10 350.00
Operating Expenses
Selling Expenses:
Wages Expense
$11 496.00
Supplies Expense
960.00
Telephone Expense
840.00
Insurance Expense
1 470.00
Total Selling Expenses
14 766.00
General & Administration Expenses
Wages Expense
7 664.00
Supplies Expense
640.00
Telephone Expense
560.00
Insurance Expense
980.00
Depreciation Expense/Building
2 000.00
Depreciation Expense/Trucks
5 000.00
Depreciation Expense/Equipment
500.00
Bad Debts Expense
100.00
Bank Loan Interest Expense
550.00
Total General & Administration Expenses
17 994.00
Total Expenses
32 760.00
Net Income (Loss) from Operations
(22 410.00)
Other Revenue:
Installation Fees
26 130.00
Net Income (Loss)
Accounting 20
$ 3 720.00
27
Lesson 18
P 16-5c
Regina Rugs
Balance Sheet
As at December 31, 20__
ASSETS
Current Assets:
Cash
Accounts Receivable
Less: Allowance for Bad Debts
Inventory (at cost)
Prepaid Insurance
Total Current Assets
$ 5 500.00
$ 8 030.00
90.00
Fixed Assets: (at cost)
Land
Building
$53 000.00
Less: Accumulated Depreciation/Building
4 800.00
Trucks
25 000.00
Less: Accumulated Depreciation/Trucks
6 500.00
Office Equipment
6 000.00
Less: Accumulated Depreciation/Equipment
3 300.00
Total Fixed Assets
Total Assets
7 940.00
11 950.00
250.00
$ 25 640.00
$12 000.00
48 200.00
18 500.00
2 700.00
81 400.00
$107 040.00
LIABILITIES
Current Liabilities:
Bank Loan Payable
Bank Loan Interest Payable
Accounts Payable
Wages Payable
Unearned Revenue
Property Taxes Payable
Total Current Liabilities
$11 000.00
550.00
2 900.00
260.00
150.00
1 400.00
$ 16 260.00
OWNER'S EQUITY
P. Matthews, Capital
Add: Net Income
$88 160.00
3 720.00
91 880.00
1 100.00
Less: P. Matthews, Drawing
Total Owner's Equity
Total Liabilities and Owner's Equity
Accounting 20
90 780.00
$107 040.00
28
Lesson 18
P 16-8a
GENERAL JOURNAL
DATE
20__
Dec.
ACCOUNT TITLE AND EXPLANATION
31
31
31
31
31
31
31
31
31
31
31
Accounting 20
Page 2
POST.
REF.
DEBIT
Unearned Revenue
Carpet Sales
Installation Fees Earned
To record the amount of unearned revenue.
1 650
Insurance Expense
Prepaid Insurance
To record the insurance expense.
2 450
Supplies Expense
Office Supplies on Hand
To record the office supplies expense.
1 200
Depreciation Expense/Building
Accumulated Depreciation/Building
To record the depreciation expense on the building.
2 000
Depreciation Expense/Truck
Accumulated Depreciation/Truck
To record the depreciation expense on the truck.
5 000
Depreciation Expense/Equipment
Accumulated Depreciation/Equpment
To record the depreciation expense on the equipment
Allowance for Bad Debts
Accounts Receivable
To record the write off of a Bad Debt.
500
50
Bad Debts Expense
Allowance for Bad Debts
To record the estimate of Bad Debts for the period.
100
Bank Loan Interest Expense
Bank Loan Interest Payable
To record the accrued Bank Loan Interest expense for the
period.
550
Accounts Receivable
Installation Fees Earned
To record the amount of installation fees earned but not yet
received.
Wages Expense
Wages Payable
To record the amount of wages earned but not yet paid to
employees.
29
80
260
CREDIT
00
1 100
550
00
00
2 450
00
1 200
00
2 000
00
5 000
00
500
00
50
00
100
00
550
00
80
00
260
00
00
00
00
00
00
00
00
00
00
00
Lesson 18
P 16-8c
GENERAL JOURNAL
DATE
20__
Dec.
ACCOUNT TITLE AND EXPLANATION
31
31
31
31
Accounting 20
Page 4
POST.
REF.
DEBIT
Inventory (ending)
Carpet Sales
Installation Fees Earned
Purchases Returns and Allowances
Purchases Discounts
R. & E. Summary
To record the closing of the credit accounts and the closing of
beginning inventory.
11 950
77 100
26 130
300
4 100
R & E Summary
Inventory (beginning)
Sales Returns and Allowances
Sales Discounts
Purchases
Transportation-in
Wages Expense
Supplies Expense
Telephone Expense
Insurance Expense
Depreciation Expense/Building
Depreciation Expense/Truck
Depreciation Expense/Equipment
Bad Debts Expense
Bank Loan Interest Expense
To record the closing of the debit accounts and the reopening
of inventory.
115 860
R & E Summary
P. Matthews, Capital
To record the closing of R & E Summary to the capital
account.
3 720
P. Matthews, Capital
P. Matthews, Drawing
To record the closing of the drawing account to the capital
account.
1 100
30
CREDIT
00
00
00
00
00
119 580
00
12 500
500
2 300
62 000
5 800
19 160
1 600
1 400
2 450
2 000
5 000
500
100
550
00
00
00
00
00
00
00
00
00
00
00
00
00
00
3 720
00
1 100
00
00
00
00
Lesson 18
P 16-8b, d
P 16-8e
Regina Rugs
Postclosing Trial Balance
As at December 31, 20__
Cash
Accounts Receivable
Allowance for Bad Debts
Inventory
Prepaid Insurance
Land
Building
Accumulated Depreciation/Building
Trucks
Accumulated Depreciation/Trucks
Office Equipment
Accumulated Depreciation/Equipment
Bank Loan Payable
Bank Loan Interest Payable
Wages Payable
Accounts Payable
Unearned Revenue
Property Taxes Payable
P. Matthews, Capital
$ 5 500.00
8 030.00
11 950.00
250.00
12 000.00
53 000.00
25 000.00
6 000.00
$121 730.00
Accounting 20
31
$ 90.00
4 800.00
6 500.00
3 300.00
11 000.00
550.00
260.00
2 900.00
150.00
1 400.00
90 780.00
$121 730.00
Lesson 18