Question

1. The End of the Accounting Cycle - the closing process (The return of Jam J!): Jam J, Corp. provides guitar lessons to customers. The financial statements for 2017 are given below. Given these financial statements, complete the following: PART A-Record closing entries: Record all four closing journal entries using the information in the financial statements for Jam) given below. For revenue and expense accounts, don't forget to close to the 'Income Summary' account first before closing the net income/(loss) amount to Retained Earnings. PART B-Prepare a post-closing trial balance: After completing PART A, prepare a post-closing trial balance for Jam J, Inc. as of December 31, 2017 with the list of accounts in the following order: assets, liabilities, common stock, and retained earnings. Jam J, Inc. Income Statement For the period ended December 31st, 2017 Service Revenue $195,575 Expenses: Salaries Expense $143,560 Supplies Expense 8,770 Depreciation Expense 1,625 Interest Expense 350 Utilities Expense 11,400 Total Expenses $ 165,705 Net Income (Loss) $29,870 Total SHE Jam J, Inc. Statement of Shareholders Equity For the period ended December 31, 2017 Common Stock Retained Earnings Beginning Balance, 1/1 $11,775 (assumed) $10,500 CS issuances $0 (assumed) Add: Net Income (from 1/S) $29,870 Less: Dividends (2,500) Ending Balance, 12/31 $11,775 37,870 $22,275 $0 $29,870 (2.500) $49,645

Answer 1

Credit Calculation Jam J, Inc. Closing Journal entries Date Account 31-Dec Service Revenue Clos. (1) Income Summary To close revenue Debit $ 195,575 $ 195,575 $ 165,705 31-Dec Income Summary Clos. (2) Salaries Expense Supplies Expense Depreciation Expense Interest Expense Utilities Expense To close expenses $ 143,560 $ 8,770 $ 1,625 $ 350 $ 11,400 $ 29,870 =195,575-165,705 31-Dec Income Summary Clos. (3) Retained Earnings To close income summary $ 29,870 $ 2,500 31-Dec Retained Earnings Clos. (4) Dividends To close dividends $ 2,500

Jam J, Inc. T Accounts Date Credit Date Credit Date Credit Debit Date Income Summary $165,705 Clos. (1) $ 29,870 Debit Date Retained Earnings Adj Bal $ 2,500 Clos. (3) $195,575 Adj Bal Clos. (2) Clos. (3) $ 10,500 $ 29,870 Debit Date Dividends $ 2,500 Clos. (4) Clos. (4) $ 2,500 S Bal $ 37,870 Bal Adj Bal Service revenue Adj Bal $195,575 $ Supplies Expense $ 8,770 Clos. (2) $195,575 Salaries Expense $ 143,560 Clos. (2) Adj Bal Adj Bal Clos. (1) $143,560 $ 8,770 $ - Bal Bal Bal Depreciation Expense $ 1,625 Clos. (2) $ Interest Expense $ 350 Clos. (2) $ . Utilities Expense $ 11,400 Clos. (2) Adj Bal Adj Bal Adj Bal $ 1,625 $ 350 $ 11,400 Bal $ . Bal $ . Bal $

Jam J, Inc. Account Names Cash Accounts Receivable Supplies Building Accumulated Depreciation-Building Accounts Payable Deferred Revenue Salaries Payable Interest Payable Notes Payable Common Stock Retained Earnings Totals Post Closing TB Debit Credit 21,325 16,560 1,630 65,000 1,625 10,500 135 2,260 350 40,000 11,775 37,870 104,515 104,515