PROBLEM 6.4B (continued)
31 9 5 0 00 31 9 5 0 00 1
11 3 4 0 00 11 3 4 0 00 2
13 0 5 0 00 13 0 5 0 00 3
67 9 5 0 00 67 9 5 0 00 97 1 4 0 00 97 1 4 0 00 17
18
ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT
PROBLEM 6.4B (continued)
PAGE
POST.
REF.
1 1
2 2013 2
9 9
10 10
11 11
12 12
13 13
PAGE
POST.
REF.
1 1
2 2013 2
3 Jun. 30 401 67 9 5 0 00 3
4 Income Summary 309 67 9 5 0 00
0
4
5 5
6 30 309 4876500 6
GENERAL JOURNAL 3
DATE DESCRIPTION DEBIT CREDIT
DATE DESCRIPTION DEBIT CREDIT
Adjusting Entries
GENERAL JOURNAL 4
Closing Entries
Fees Income
Income Summary
PROBLEM 6.4B (continued)
ACCOUNT Supplies ACCOUNT NO.
ACCOUNT Computers ACCOUNT NO.
ACCOUNT Accumulated Depreciation—Computers ACCOUNT NO.
2013
GENERAL LEDGER
121
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
131
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
142
DATE DESCRIPTION
POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
PROBLEM 6.4B (continued)
ACCOUNT Scott Wilson, Capital ACCOUNT NO.
2010
ACCOUNT Scott Wilson, Drawing ACCOUNT NO.
2013
ACCOUNT Income Summary ACCOUNT NO.
2013
CREDIT
BALANCE
DEBIT CREDIT
DATE DESCRIPTION
POST.
REF. DEBIT
DATE DESCRIPTION
301
CREDIT
309
POST.
REF. DEBIT CREDIT
GENERAL LEDGER
302
DATE DESCRIPTION
BALANCE
DEBIT
POST.
REF. DEBIT CREDIT
CREDIT
BALANCE
DEBIT
PROBLEM 6.4B (continued)
ACCOUNT Fees Income ACCOUNT NO.
2013
ACCOUNT Salaries Expense ACCOUNT NO.
2013
ACCOUNT Utilities Expense ACCOUNT NO.
2013
DATE
POST.
REF.
BALANCE
GENERAL LEDGER
DEBITDESCRIPTION CREDIT
CREDIT
DEBIT
DEBIT
POST.
REF.
CREDIT
BALANCE
514
CREDIT
401
BALANCE
DEBIT
DATE CREDIT
511
DEBIT
DATE
DESCRIPTION
POST.
REF.
CREDITDESCRIPTION DEBIT
PROBLEM 6.4B (continued)
ACCOUNT Supplies Expense ACCOUNT NO.
2013
ACCOUNT Travel Expense ACCOUNT NO.
2013
ACCOUNT Depreciation Expense—Computers ACCOUNT NO.
2013
523
CREDIT
BALANCE
DEBIT CREDIT
517
519
DEBIT CREDIT
DATE DESCRIPTION
POST.
REF. DEBIT
CREDIT
BALANCE
DEBIT CREDIT
CREDIT
BALANCE
DATE DESCRIPTION
POST.
REF. DEBIT
DATE DESCRIPTION
POST.
REF. DEBIT
PROBLEM 6.4B (continued)
Cash 3195000
Accounts Receivable 1134000
Supplies 1305000
ACCOUNT NAME DEBIT CREDIT
Scott Wilson, CPA
Post-closing Trial Balance
June 30, 2013
CRITICAL THINKING PROBLEM 6.1
1 Cash 163 2 0 0 00
2 Accounts Receivable 36 0 0 0 00
9 Jada McBride, Drawing 24 0 0 0 00
10 Fees Income 330 0 0 0 00
11 Supplies Expense (a) 14 4 0 0 00
19
Contemporary Fashions
Month Ended December 31, 2013
Worksheet
DEBIT CREDIT
ACCOUNT NAME
TRIAL BALANCE ADJUSTMENTS
DEBIT CREDIT
CRITICAL THINKING PROBLEM 6.1 (continued)
163 2 0 0 00 163 2 0 0 00 1
36 0 0 0 00 36 0 0 0 00 2
330 0 0 0 00 330 0 0 0 00 10
14 4 0 0 00 14 4 0 0 00 11
9 6 0 000 960000 12
44 4 0 0 00 44 4 0 0 00 13
CREDIT DEBIT CREDIT
ADJUSTED TRIAL BALANCE INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT DEBIT
CRITICAL THINKING PROBLEM 6.1 (continued)
33000000
1440000
Revenue
Contemporary Fashions
Income Statement
Month Ended December 31, 2013
Fees Income
Expenses
Supplies Expense
CRITICAL THINKING PROBLEM 6.1 (continued)
163 2 0 0 00
36 0 0 0 00
14 4 0 0 00
33 6 0 0 00
336 0 0 0 00
Accounts Receivable
Machinery
Contemporary Fashions
Balance Sheet
December 31, 2013
Assets
Prepaid Insurance
Cash
Supplies
CRITICAL THINKING PROBLEM 6.1 (continued)
PAGE
POST.
REF.
1 1
2 2013 2
3 Dec. 31 14 4 0 0 00 3
4 Supplies 14 4 0 0 00 4
PAGE
POST.
REF.
1 1
2 2013 2
3 Dec. 31 330 0 0 0 00 3
4 Income Summary 330 0 0 0 00
0
4
5 5
6 31 7992000 6
Supplies Expense
Adjusting Entries
3
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
4
DATE DESCRIPTION DEBIT CREDIT
GENERAL JOURNAL
Closing Entries
Fees Income
Income Summary
CRITICAL THINKING PROBLEM 6.1 (continued)
Cash 163 2 0 0 00
Accounts Receivable 36 0 0 0 00
Supplies 14 4 0 0 00
Prepaid Insurance 33 6 0 0 00
Machinery 336 0 0 0 00
Accumulated Depreciation—Machinery 4800 00
Accounts Payable 54 0 0 0 00
Jada McBride, Capital 524 4 0 0 00
Totals 583 2 0 0 00 583 2 0 0 00
Analyze: The net income would be $269,280.
CRITICAL THINKING PROBLEM 6.2
1. Reed made the following errors preparing the closing entries:
a.
2. PAGE
DESCRIPTION
POST.
REF.
1 2013 1
2 Dec. 31 James Walker, Capital 20 7 5 0 00 2
Contemporary Fashions
Post-closing Trial Balance
ACCOUNT NAME DEBIT CREDIT
December 31, 2013
DEBIT DATE
Accumulated Depreciation and Accounts Payable are permanent accounts that continue from accounting
CREDIT
GENERAL JOURNAL
CRITICAL THINKING PROBLEM 6.2 (continued)
3. The proof of this entry is:
Fees Income
Expenses:
Salaries Expense 39,000
Supplies Expense 2,500
Depreciation Expense 1,200
Net Income
Withdrawals
49,000
42,700
6,300
(3,500)
1.
2.
4.
No. A thorough analysis of the components of the income statement would reveal how costs directly
Current assets compared with current liabilities.
The income statement might help determine the adequacy of profit, how to improve revenue and hold
down expenses, how to reduce expenses without decreasing revenue, and how to even out the
business operating cycle. Balance sheet data might influence decisions concerning growth of equity,
SOLUTIONS TO PRACTICE TEST
Part A True-False
2. FALSE
Part B Matching