Serial Problem, SP 4 (Continued)
Part 2
BUSINESS SOLUTIONS
Post-Closing Trial Balance
December 31, 2015
Debit Credit
Cash…………………………………………………………………….. $ 48,372
Accounts receivable……………………………………………… 5,668
Computer supplies……………………………………………….. 580
Serial Problem, SP 4 (Continued)
[Instructor Note: Ledger includes all entries from prior three months. The Working
Papers shorten the solution by showing account balances as of December 31.]
General Ledger
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Oct. 1 45,000 45,000
2 3,300 41,700
5 2,220 39,480
8 1,420 38,060
15 4,800 42,860
Serial Problem, SP 4 (Continued)
Accounts Receivable Acct. No. 106
Date Explanation PR Debit Credit Balance
Oct. 6 4,800 4,800
12 1,400 6,200
15 4,800 1,400
22 1,400 0
Computer Supplies Acct. No. 126
Date Explanation PR Debit Credit Balance
Oct. 3 1,420 1,420
Prepaid Insurance Acct. No. 128
Date Explanation PR Debit Credit Balance
Prepaid Rent Acct. No. 131
Date Explanation PR Debit Credit Balance
Office Equipment Acct. No. 163
Date Explanation PR Debit Credit Balance
Accumulated Depreciation—Office Equipment Acct. No. 164
Date Explanation PR Debit Credit Balance
Serial Problem, SP 4 (Continued)
Computer Equipment Acct. No. 167
Date Explanation PR Debit Credit Balance
Accumulated Depreciation—Computer Equipment Acct. No. 168
Date Explanation PR Debit Credit Balance
Accounts Payable Acct. No. 201
Date Explanation PR Debit Credit Balance
Wages Payable Acct. No. 210
Date Explanation PR Debit Credit Balance
Unearned Computer Services Revenue Acct. No. 236
Date Explanation PR Debit Credit Balance
Dec. 14 1,500 1,500
S. Rey, Capital Acct. No. 301
Date Explanation PR Debit Credit Balance
S. Rey, Withdrawals Acct. No. 302
Date Explanation PR Debit Credit Balance
Serial Problem, SP 4 (Continued)
Computer Services Revenue Acct. No. 403
Date Explanation PR Debit Credit Balance
Oct. 6 4,800 4,800
12 1,400 6,200
Depreciation Expense—Office Equipment Acct. No. 612
Date Explanation PR Debit Credit Balance
Depreciation Expense—Computer Equipment Acct. No. 613
Date Explanation PR Debit Credit Balance
Wages Expense Acct. No. 623
Date Explanation PR Debit Credit Balance
Oct. 31 875 875
Insurance Expense Acct. No. 637
Date Explanation PR Debit Credit Balance
Rent Expense Acct. No. 640
Date Explanation PR Debit Credit Balance
Serial Problem, SP 4 (Concluded)
Computer Supplies Expense Acct. No. 652
Date Explanation PR Debit Credit Balance
Advertising Expense Acct. No. 655
Date Explanation PR Debit Credit Balance
Mileage Expense Acct. No. 676
Date Explanation PR Debit Credit Balance
Miscellaneous Expense Acct. No. 677
Date Explanation PR Debit Credit Balance
Repairs Expense—Computer Acct. No. 684
Date Explanation PR Debit Credit Balance
Income Summary Acct. No. 901
Date Explanation PR Debit Credit Balance
Reporting in Action — BTN 4-1
1. The revenue items from its income statement must be identified, and those would be credited
2. The total expenses that would be debited to Income Summary as step 2
in the closing entry process must be computed. Apple’s total expenses
3. The balance of Income Summary before it is closed as of its fiscal
4. Solution depends on the financial statements accessed.
Comparative Analysis — BTN 4-2
1. Apple’s current ratios: ($ in millions)
Current year…………………………. $73,286 / $43,658 = 1.68
2. In both years, Google has the higher current ratio (4.58 vs 1.68 for the
4. Google’s current ratio is above (better than) the industry average for