482 • Working Papers
16-5 ON YOUR OWN, p. 505
Preparing a post-closing trial balance
ACCOUNT TITLE DEBIT CREDIT
TE
Foreign Auto Supply
Post-Closing Trial Balance
December 31, 20–
Cash 13 4 8 5 00
Merchandise Inventory 121 1 5 2 00
Supplies—Office 7 4 1 00
Notes Receivable 3 5 6 0 00
Equipment 35 4 8 7 00
Accumulated Depreciation—Equipment 12 4 5 0 00
Chapter 16 Financial Statements and Closing Entries for a Corporation • 483
Name Date Class
16-1 APPLICATION PROBLEM (LO1), p. 509
Preparing an income statement for a merchandising business
ACCOUNT TITLE DEBIT CREDIT
(Note: Adjusted trial balance is continued on next page.)
Top-Light Corporation
Adjusted Trial Balance
December 31, 20–
Cash 14 0 2 4 81
Petty Cash 3 0 0 00
Office Equipment 23 8 1 4 00
Accumulated Depreciation—Office Equipment 18 6 0 9 25
Store Equipment 51 9 4 8 65
Accumulated Depreciation—Store Equipment 23 5 0 7 84
Accounts Payable 13 7 1 8 93
Sales Tax Payable 2 5 7 4 10
Employee Income Tax Payable 7 9 0 00
Social Security Tax Payable 1 6 8 3 19
Medicare Tax Payable 3 9 3 65
Health Insurance Premiums Payable 3 8 0 00
484 • Working Papers
16-1 APPLICATION PROBLEM (continued)
ACCOUNT TITLE DEBIT CREDIT
Top-Light Corporation
Adjusted Trial Balance
December 31, 20–
Dividends 17 2 0 0 00
Income Summary 2 1 1 8 18
Depreciation Expense—Store Equipment 8 4 4 0 00
Insurance Expense 12 0 0 0 00
Miscellaneous Expense 4 1 5 9 31
Payroll Taxes Expense 14 0 1 9 64
Rent Expense 8 4 0 0 00
Salary Expense 155 7 7 3 80
Supplies Expense—Office 2 4 8 1 72
TE
Chapter 16 Financial Statements and Closing Entries for a Corporation • 485
Name Date Class
16-1 APPLICATION PROBLEM (concluded)
1., 2.
% OF NET
SALES
Top-Light Corporation
Income Statement
For Year Ended December 31, 20–
Operating Revenue:
Sales 557 9 0 0 50
Less: Sales Discount 1 3 7 1 30
Sales Returns and Allowances 3 2 7 9 39 4 6 5 0 69
Gross Profit 296 4 3 2 99 53.6
Operating Expenses:
Advertising Expense 18 4 1 1 32
Credit Card Fee Expense 5 6 9 2 71
Depreciation Expense—Office Equipment 5 4 6 0 00
Depreciation Expense—Store Equipment 8 4 4 0 00
Insurance Expense 12 0 0 0 00
Miscellaneous Expense 4 1 5 9 31
Payroll Taxes Expense 14 0 1 9 64
Rent Expense 8 4 0 0 00
Salary Expense 155 7 7 3 80
Supplies Expense—Office 2 4 8 1 72
Supplies Expense—Store 3 6 4 5 81
Uncollectible Accounts Expense 1 4 9 4 12
486 • Working Papers
16-2 APPLICATION PROBLEM (LO2), p. 509
Preparing a statement of stockholders’ equity
TE
Top-Light Corporation
Statement of Stockholders’ Equity
For Year Ended December 31, 20–
Capital Stock:
$25.00 Per Share
January 1, 20–, 2,000 Shares Issued 50 0 0 0 00
Issued during Current Year, 300 Shares 7 5 0 0 00
Balance, December 31, 20–, 2,300 Shares Issued 57 5 0 0 00
Chapter 16 Financial Statements and Closing Entries for a Corporation • 487
16-3 APPLICATION PROBLEM (LO3), p. 509
Preparing a balance sheet for a corporation
Top-Light Corporation
Balance Sheet
December 31, 20–
Assets
Current Assets:
Cash 14 0 2 4 81
Notes Receivable 6 1 1 0 00
Interest Receivable 4 8 88
Total Current Assets 126 6 1 6 90
Plant Assets:
Office Equipment 23 8 1 4 00
Less Accumulated Depreciation—Office Equipment 18 6 0 9 25 5 2 0 4 75
Store Equipment 51 9 4 8 65
Less Accumulated Depreciation—Store Equipment 23 5 0 7 84 28 4 4 0 81
Total Plant Assets 33 6 4 5 56
Total Assets 160 2 6 2 46
Liabilities
Current Liabilities:
Accounts Payable 13 7 1 8 93
Stockholders’ Equity
Capital Stock 57 5 0 0 00
Retained Earnings 76 9 2 5 43
Total Stockholders’ Equity 134 4 2 5 43
Total Liabilities and Stockholders’ Equity 160 2 6 2 46
488 • Working Papers
16-4 APPLICATION PROBLEM (LO4), p. 510
Journalizing closing entries
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
6 6
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
29 29
30 30
31 31
TE
Closing Entries
20–
Dec. 31 Sales 557 9 0 0 50
Purchases Discount 2 2 1 8 16
Purchases Returns and Allowances 3 1 1 9 45
Interest Income 1 7 0 07
Income Summary 563 4 0 8 18
Depreciation Expense—Office Equipment 5 4 6 0 00
Depreciation Expense—Store Equipment 8 4 4 0 00
Insurance Expense 12 0 0 0 00
Miscellaneous Expense 4 1 5 9 31
Payroll Taxes Expense 14 0 1 9 64
Rent Expense 8 4 0 0 00
Salary Expense 155 7 7 3 80
Supplies Expense—Office 2 4 8 1 72
Supplies Expense—Store 3 6 4 5 81
21
Chapter 16 Financial Statements and Closing Entries for a Corporation • 489
16-5 APPLICATION PROBLEM (LO5), p. 510
Preparing a post-closing trial balance
ACCOUNT TITLE DEBIT CREDIT
MidSouth Electric
Post-Closing Trial Balance
December 31, 20–
Cash 23 5 2 4 22
Petty Cash 2 5 0 00
Accounts Receivable 23 6 4 3 44
Allowance for Uncollectible Accounts 3 9 8 0 00
Merchandise Inventory 156 2 6 2 33
Supplies 3 5 2 00
Notes Receivable 6 4 9 0 00
Interest Receivable 3 2 45
490 • Working Papers
16-M MASTERY PROBLEM (LO1, 2, 3, 4), p. 511
Preparing financial statements and closing entries
ACCOUNT TITLE DEBIT CREDIT
Paulson Corporation
Adjusted Trial Balance
December 31, 20–
Cash 28 3 6 2 11
Petty Cash 2 0 0 00
Accounts Receivable 21 1 9 7 09
Allowance for Uncollectible Accounts 2 5 1 4 26
Merchandise Inventory 107 1 7 7 46
Accumulated Depreciation—Store Equipment 28 6 6 4 80
Accounts Payable 17 1 4 8 66
Sales Tax Payable 3 2 1 7 62
Employee Income Tax Payable 9 8 8 00
Social Security Tax Payable 2 1 0 3 99
Medicare Tax Payable 4 9 2 06
Health Insurance Premiums Payable 4 7 8 40
Retirement Benefits Payable 4 8 3 60
TE
Name Date Class
16-M MASTERY PROBLEM (continued)
ACCOUNT TITLE DEBIT CREDIT
Paulson Corporation
Adjusted Trial Balance
December 31, 20–
Dividends 20 0 0 0 00
Income Summary 5 6 4 8 44
Advertising Expense 4 8 6 7 20
Credit Card Fee Expense 7 1 1 5 89
Depreciation Expense—Office Equipment 7 8 8 5 00
Depreciation Expense—Store Equipment 9 4 3 0 00
Insurance Expense 8 6 4 0 00
Miscellaneous Expense 3 6 3 4 84
Payroll Taxes Expense 18 6 8 8 68
Rent Expense 8 7 3 6 00
Salary Expense 184 7 7 0 26
492 • Working Papers
16-M MASTERY PROBLEM (continued)
1., 2.
% OF NET
SALES
TE
Paulson Corporation
Income Statement
For Year Ended December 31, 20–
Operating Revenue:
Sales 697 3 7 5 62
Purchases Returns and Allowances 2 5 5 4 81 4 5 1 3 83
Net Purchases 320 5 3 1 48
Total Cost of Mdse. Available for Sale 433 3 5 7 38
Less Mdse. Inventory, December 31, 20– 107 1 7 7 46
Cost of Merchandise Sold 326 1 7 9 92 47.2
Gross Profit 365 3 8 2 34 52.8
Expenses:
Rent Expense 8 7 3 6 00
Salary Expense 184 7 7 0 26
Supplies Expense—Office 2 9 8 4 34
Supplies Expense—Store 3 5 2 3 33
Uncollectible Accounts Expense 2 3 8 4 10
Utilities Expense 5 1 6 4 04
Total Expenses 267 8 2 3 68 38.7
Chapter 16 Financial Statements and Closing Entries for a Corporation • 493
Name Date Class
16-M MASTERY PROBLEM (continued)
3.
Paulson Corporation
Statement of Stockholders’ Equity
For Year Ended December 31, 20–
Capital Stock:
$10.00 Par Value
January 1, 20–, 4,500 Shares Issued 45 0 0 0 00
Issued during Current Year, 500 Shares 5 0 0 0 00
Balance, December 31, 20–, 5,000 Shares Issued 50 0 0 0 00
Retained Earnings:
494 • Working Papers
16-M MASTERY PROBLEM (continued)
4.
TE
Paulson Corporation
Balance Sheet
December 31, 20–
Assets
Current Assets:
Cash 28 3 6 2 11
Petty Cash 2 0 0 00
Interest Receivable 7 1 20
Total Current Assets 169 6 6 7 63
Plant Assets:
Office Equipment 25 8 9 0 98
Less Accumulated Depreciation—Office Equipment 23 9 2 1 56 1 9 6 9 42
Store Equipment 61 5 1 4 04
Less Accumulated Depreciation—Store Equipment 28 6 6 4 80 32 8 4 9 24
Total Plant Assets 34 8 1 8 66
Total Assets 204 4 8 6 29
Liabilities
Health Insurance Premiums Payable 4 7 8 40
Retirement Benefits Payable 4 8 3 60
Unemployment Tax Payable—Federal 3 0 8 91
Unemployment Tax Payable—State 1 5 3 32
Federal Income Tax Payable 1 5 1 9 82
Dividends Payable 5 0 0 0 00
Total Liabilities 31 8 9 4 38
Stockholders’ Equity
Name Date Class
16-M MASTERY PROBLEM (concluded)
5.
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF. DEBIT CREDIT
1 1
2 2
3 3
4 4
5 5
6 6
7 7
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
29 29
30 30
31 31
19
Closing Entries
20–
Dec. 31 Sales 697 3 7 5 62
Purchases Discount 1 9 5 9 02
Purchases Returns and Allowances 2 5 5 4 81
Interest Income 2 9 3 76
Income Summary 702 1 8 3 21
31 Income Summary 620 2 0 2 17
Depreciation Expense—Office Equipment 7 8 8 5 00
Depreciation Expense—Store Equipment 9 4 3 0 00
Insurance Expense 8 6 4 0 00
Miscellaneous Expense 3 6 3 4 84
Payroll Taxes Expense 18 6 8 8 68
Rent Expense 8 7 3 6 00
Salary Expense 184 7 7 0 26
Supplies Expense—Office 2 9 8 4 34
Supplies Expense—Store 3 5 2 3 33
16-C CHALLENGE PROBLEM (LO1), p. 511
Preparing an income statement
ACCOUNT TITLE DEBIT CREDIT
KLT Corporation
Adjusted Trial Balance
December 31, 20–
Cash 54 1 9 4 34
Income Summary 2 6 4 2 37
Domestic Sales 252 4 6 6 34
International Sales 325 4 3 6 34
Internet Sales 264 2 4 5 22
Sales Discount 5 2 1 4 32
Sales Returns and Allowances 6 5 2 3 23
Purchases 364 3 2 4 25
Insurance Expense 13 0 0 0 00
Miscellaneous Expense 19 3 2 7 34
Payroll Taxes Expense 36 2 3 0 85
Rent Expense 24 0 0 0 00
Salary Expense 262 5 4 2 36
Supplies Expense 6 2 6 2 95
Chapter 16 Financial Statements and Closing Entries for a Corporation • 497
Name Date Class
16-C CHALLENGE PROBLEM (concluded)
1., 2.
% OF NET
SALES
KLT Corporation
Income Statement
For Year Ended December 31, 20–
Operating Revenue:
Domestic Sales 252 4 6 6 34
International Sales 325 4 3 6 34
Internet Sales 264 2 4 5 22
Less: Purchases Discount 6 5 4 2 16
Purchases Returns and Allowances 3 8 7 9 85 10 4 2 2 01
Net Purchases 353 9 0 2 24
Total Cost of Mdse. Available for Sale 420 8 6 7 20
Less Mdse. Inventory, December 31, 20– 64 3 2 2 59
Cost of Merchandise Sold 356 5 4 4 61 42.9
Gross Profit 473 8 6 5 74 57.1
Operating Expenses:
Advertising Expense 32 4 0 0 00
Credit Card Fee Expense 7 5 3 4 23
Depreciation Expense—Office Equipment 6 9 0 0 00
Depreciation Expense—Store Equipment 12 5 0 0 00
Insurance Expense 13 0 0 0 00
Miscellaneous Expense 19 3 2 7 34
Payroll Taxes Expense 36 2 3 0 85
Rent Expense 24 0 0 0 00
Salary Expense 262 5 4 2 36
Supplies Expense 6 2 6 2 95
