Question

Acquired $51,000 cash from the issue of common stock. Paid $13,600 cash in advance for rent. The payment was for the period April 1, Year 1, to March 31, Year 2. Performed services for customers on account for $104,000. Incurred operating expenses on account of $43,000. Collected $79,500 cash from accounts receivable. Paid $37,000 cash for salary expense. Paid $34,400 cash as a partial payment on accounts payable. Adjusting Entries Made the adjusting entry for the expired rent. (See Event 2.) Recorded $5,600 of accrued salaries at the end of Year 1. Events for Year 2 Paid $5,600 cash for the salaries accrued at the end of the prior accounting period. Performed services for cash of $53,000. Purchased $4,400 of supplies on account. Paid $15,300 cash in advance for rent. The payment was for one year beginning April 1, Year 2. Performed services for customers on account for $120,000. Incurred operating expenses on account of $57,500. Collected $105,000 cash from accounts receivable. Paid $55,000 cash as a partial payment on accounts payable. Paid $33,100 cash for salary expense. Paid a $13,000 cash dividend to stockholders. Adjusting Entries Made the adjusting entry for the expired rent. (Hint: Part of the rent was paid in Year 1.) Recorded supplies expense. A physical count showed that $700 of supplies were still on hand. Problem 13-34A Part f f. Prepare a post-closing trial balance for December 31, Year 1.

Answer 1

Post-Closing Trial Balance for December 31, Year 1:

Debit Credit

Common Stock $51,000

Cash $45,500

Rent Prepaid $3,400

Accounts Receivable $24,500

Accounts Payable $8,600

Salaries Payable $5,600

Retained Earnings $8,200

Total $73,400 $73,400

Step-by-step explanation:

a) A post-closing trial balance lists balance sheet accounts containing positive balances for a financial reporting period. It agrees the total of all debit and credit balances. It includes the result from Income Statement.

b) The preparation of a trial balance may be pre-closing or post-closing. A pre-closing trial balance includes balances of both temporary and permanent accounts, and a post-closing trial balance excludes the temporary account includes the company's closing entries.

c) Cash Account:

Debit Credit Balance

Common Stock $51,000 $51,000

Rent $13,600 $37,400

Accounts Receivable $79,500 $116,900

Salaries Expense $37,000 $79,900

Accounts Payable $34,400 $45,500

d) Accounts Receivable

Debit Credit Balance

Service Revenue $104,000 $104,000

Cash $79,500 $24,500

e) Accounts Payable

Debit Credit Balance

Operating Expense $43,000 $43,000

Cash $34,400 $8,600

f) Salaries Payable

Debit Credit Balance

Salaries Expense $5,600 $5,600

g) Rent Prepaid

Debit Credit Balance

Cash $13,600 $13,600

Rent Expense $10,200 $3,400

h) Income Statement

Service Revenue $104,000

less Operating Exp 43,000

Gross Profit 61,000

less Expenses:

Rent 10,200

Salaries ($37,000 + 5,600) 42,600

Net Income $8,200