Question

Prepare Sibley Co.'s post-closing trial balance. The company's accounts on December 31 include Cash, $900; Notes Payable, $965; Accounts Receivable, $1,500; Accounts Payable, $2,900; Common Stock, $1,185; Retained Earnings, $1,000; Accrued Expenses, $2,400; Prepaid Expenses, $1,275; Machinery, $4,000, with $890 accumulated depreciation; and Land, $1,665.

Answer 1

To prepare Sibley Co.'s post-closing trial balance, list the permanent account balances. The sum of asset account balances must be equal to the sum of liability and equity account balances.

Step-by-step explanation:

To prepare Sibley Co.'s post-closing trial balance, we need to list down all the balances of the permanent accounts after closing entries have been made. Temporary accounts such as revenues and expenses are not included since they have been closed to Retained Earnings. post-closing trial balance: Cash: $900, Accounts Receivable: $1,500, Prepaid Expenses: $1,275, Machinery: $4,000, Less: Accumulated Depreciation: ($890), Land: $1,665, Notes Payable: $965, Accounts Payable: $2,900, Accrued Expenses: $2,400, Common Stock: $1,185, Retained Earnings: $1,000

Ensure that the total of debit balances equals the total of credit balances. In this case, the sum of all assets (Cash, Accounts Receivable, Prepaid Expenses, Machinery - Accumulated Depreciation, Land) should equal the sum of all liabilities (Notes Payable, Accounts Payable, Accrued Expenses) plus the shareholders' equity (Common Stock, Retained Earnings).