Question

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2018, the end of the fiscal year, the þccountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows: The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 2018 Adjusted Trial Balance Account Title Dr. Cr. Cash $14,020 Accounts Receivable 30,530 Supplies 4,770 Prepaid Insurance 10,300 Land 108,000 Buildings 390,000 Accumulated Depreciation-Buildings 127,100 Equipment 282,000 Accumulated Depreciation-Equipment 165,500 Accounts Payable 36,110 Salaries Payable 3,580 Uneamed Rent 1,620 Common Stock 162,000 Retained Earnings 300,850 Dividends 27,100

Answer 1

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Solution: Date Debit Credit Oct.31 514920 5440 520360 Oct.31 450400 369150 20000 16800 Journal entries Account title and explaination Service Revenue Rent Revenue Income Summary (To close revenue account) Income Summary (plug) Salaries expense Depreciation Expense - Equipment Rent Expense Supplies Expense Utilities Expense Depreciation Expense - Building Repairs Expense Insurance Expense Misc Expense (To close expenses accounts) Income Summary (520360-450400) Retained Earnings (To close income summary account to retained earnings) Retained Earnings Dividends (To close dividends accounts to retained earnings) 11880 10730 7160 5910 3240 5530 Oct.31 $ 69,960 $ 69,960 Oct.31 $ 27,100 $ 27,100 Picture of Part 3 is not completely visible in term of Dividends statement. Hence: (37900-27100) $ 10,800 Net loss