HANDOUT 4–4
CLOSING ENTRIES, POSTING TO T-ACCOUNTS,
PREPARATION OF POST-CLOSING TRIAL BALANCE
Prepare the required closing entries for Deana’s Decorators using the adjusted account balances set forth
in Handout 4–2. Post the entries to the T-accounts shown on the next page. Then, prepare a post-closing
trial balance.
Date
Accounts
Debit
Credit
HANDOUT 4–4, continued
Assets
Liabilities
Stockholders’ Equity
+ Cash –
Unadj.
43,450
Adj.
43,450
+ Supplies –
Unadj.
1,800
1,000
(a)
Adj.
800
+ Accounts Receivable –
Unadj.
4,000
Adj.
4,000
+ Prepaid Rent –
Unadj.
12,000
4,000
(b)
Adj.
8,000
+ Prepaid Insurance –
Unadj.
6,000
3,500
(c)
Adj.
2,500
+ Certificate of Deposit –
Unadj.
20,000
Adj.
20,000
+ Interest Receivable –
Unadj.
0
(f)
1,200
Adj.
1,200
+ Property, Plant & Equipment –
Unadj.
40,000
Adj.
40,000
− Accumulated Depreciation +
0
Unadj.
2,000
(d)
2,000
− Accounts Payable +
250
Unadj.
250
Adj.
− Dividend Payable +
0
Unadj.
750
(i)
750
Adj.
− Unearned Revenue +
500
Unadj.
(e)
400
Adj.
100
− Notes Payable +
30,000
Unadj.
30,000
Adj.
− Interest Payable +
0
Unadj.
3,000
(g)
3,000
Adj.
− Income Taxes Payable +
0
Unadj.
26,110
(h)
26,110
Adj.
Stockholders’ Equity
+ Depreciation Expense –
(d)
2,000
+ Interest Expense –
(g)
3,000
+ Income Tax Expense –
(h)
26,110
+ Contributed Capital –
10,000
Unadj.
− Retained Earnings +
0
Unadj.
+ Dividends –
Unadj.
0
(i)
750
Adj.
750
− Service Revenue +
120,000
Unadj.
400
(e)
120,400
Adj.
+ Interest Revenue –
1,200
(f)
+ Salaries and Wage Expense –
Unadj.
32,000
+ Utilities Expense –
Unadj.
1,000
+ Telephone Expense –
Unadj.
500
+ Supplies Expense –
(a)
1,000
+ Rent Expense –
(b)
4,000
+ Insurance Expense –
(c)
3,500
HANDOUT 4–4, continued
Deana’s Decorators
Post-Closing Trial Balance
December 31, 2016
Account
Debit
Credit
Cash
Supplies
Accounts Receivable
Prepaid Rent
Prepaid Insurance
Certificate of Deposit
Interest Receivable
Property, Plant & Equipment
Accumulated Depreciation
Accounts Payable
Dividend Payable
Unearned Revenue
Notes Payable
Interest Payable
Income Taxes Payable
Contributed Capital
Retained Earnings
Dividends
Revenue
Interest Revenue
Salaries and Wage Expense
Utilities Expense
Telephone Expense
Supplies Expense
Rent Expense
Insurance Expense
Depreciation Expense
Interest Expense
Income Tax Expense
Totals
HANDOUT 4–4 SOLUTION
CLOSING ENTRIES, POSTING TO T-ACCOUNTS,
PREPARATION OF POST-CLOSING TRIAL BALANCE
Prepare the required closing entries for Deana’s Decorators using the adjusted account balances set forth
in Handout 4–2. Post the entries to the T-accounts shown on the next page. Then, prepare a post-closing
trial balance.
Date
Accounts
Debit
Credit
Dec. 31
Service Revenue (–R)
120,400
2016
Interest Revenue (–R)
1,200
Salaries and Wage Expense (–E)
32,000
Utilities Expense (–E)
1,000
Telephone Expense (–E)
500
Supplies Expense (–E)
1,000
Rent Expense (–E)
4,000
Insurance Expense (–E)
3,500
Depreciation Expense (–E)
2,000
Interest Expense (–E)
3,000
Income Tax Expense (–E)
26,110
Retained Earnings (+SE)
48,490
Dec. 31
Retained Earnings (–SE)
750
2016
Dividends (–D)
750
HANDOUT 4–4 SOLUTION, continued
Assets
Liabilities
Stockholders’ Equity
+ Cash –
Unadj.
43,450
Adj.
43,450
+ Supplies –
Unadj.
1,800
1,000
(a)
Adj.
800
+ Accounts Receivable –
Unadj.
4,000
Adj.
4,000
+ Prepaid Rent –
Unadj.
12,000
4,000
(b)
Adj.
8,000
+ Prepaid Insurance –
Unadj.
6,000
3,500
(c)
Adj.
2,500
+ Certificate of Deposit –
Unadj.
20,000
Adj.
20,000
+ Interest Receivable –
Unadj.
0
(f)
1,200
Adj.
1,200
+ Property, Plant & Equipment
–
Unadj.
40,000
Adj.
40,000
− Accumulated Depreciation +
0
Unadj.
2,000
(d)
2,000
− Accounts Payable +
250
Unadj.
250
Adj.
− Dividend Payable +
0
Unadj.
750
(i)
750
Adj.
− Unearned Revenue +
500
Unadj.
(e)
400
Adj.
100
− Notes Payable +
30,000
Unadj.
30,000
Adj.
− Interest Payable +
0
Unadj.
3,000
(g)
3,000
Adj.
− Income Taxes Payable +
0
Unadj.
26,110
(h)
26,110
Adj.
Stockholders’ Equity
+ Depreciation Expense –
(d)
2,000
2,000
Close
Bal
0
+ Interest Expense –
(g)
3,000
3,000
Close
Bal
0
+ Income Tax Expense –
(h)
26,110
26,110
Close
Bal
0
+ Contributed Capital –
10,000
Unadj.
− Retained Earnings +
0
Unadj.
Close
750
48,490
Close
47,740
Bal
+ Dividends –
Unadj.
0
(i)
750
Adj.
750
750
Close
Bal.
0
− Service Revenue +
120,000
Unadj.
400
(e)
Close
120,400
120,400
Adj.
0
Bal
+ Interest Revenue –
Close
1,200
1,200
(f)
0
Bal
+ Salaries and Wage Expense –
Unadj.
32,000
32,000
Close
Bal
0
+ Utilities Expense –
Unadj.
1,000
1,000
Close
Bal
0
+ Telephone Expense –
Unadj.
500
500
Close
Bal
0
+ Supplies Expense –
(a)
1,000
1,000
Close
Bal
0
+ Rent Expense –
(b)
4,000
4,000
Close
Bal
0
+ Insurance Expense –
(c)
3,500
3,500
Close
Bal
0
HANDOUT 4–4 SOLUTION, continued
Deana’s Decorators
Post-closing Trial Balance
December 2016
Account
Debit
Credit
Cash
$ 43,450
Supplies
800
Accounts Receivable
4,000
Prepaid Rent
8,000
Prepaid Insurance
2,500
Certificate of Deposit
20,000
Interest Receivable
1,200
Property, Plant & Equipment
40,000
Accumulated Depreciation
$ 2,000
Accounts Payable
250
Dividend Payable
750
Unearned Revenue
100
Notes Payable
30,000
Interest Payable
3,000
Income Taxes Payable
26,110
Contributed Capital
10,000
Retained Earnings
47,740
Dividends
0
Service Revenue
0
Interest Revenue
0
Salaries and Wage Expense
0
Utilities Expense
0
Telephone Expense
0
Supplies Expense
0
Rent Expense
0
Insurance Expense
0
Depreciation Expense
0
Interest Expense
0
Income Tax Expense
0
Totals
$119,950
$119,950