Question

The following transactions pertain to Smith Training Company for Year 1:

Jan.	30		Established the business when it acquired $54,000 cash from the issue of common stock.
Feb.	1		Paid rent for office space for two years, $15,600 cash.
Apr.	10		Purchased $790 of supplies on account.
July	1		Received $30,000 cash in advance for services to be provided over the next year.
	20		Paid $593 of the accounts payable from April 10.
Aug.	15		Billed a customer $10,200 for services provided during August.
Sept.	15		Completed a job and received $3,300 cash for services rendered.
Oct.	1		Paid employee salaries of $36,500 cash.
	15		Received $9,500 cash from accounts receivable.
Nov.	16		Billed customers $38,500 for services rendered on account.
Dec.	1		Paid a dividend of $600 cash to the stockholders.
	31		Adjusted records to recognize the services provided on the contract of July 1.
	31		Recorded $2,200 of accrued salaries as of December 31.
	31		Recorded the rent expense for the year. (See February 1.)
	31		Physically counted supplies; $110 was on hand at the end of the period.

c. Prepare a trial balance.

e. Record the entries to close the Year 1 temporary accounts to Retained Earnings in the general journal and post to the T-accounts.

f. Prepare a post-closing trial balance for Year 1.

Answer 1

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Part c and f
	Adjusted Trial		Post Closing
Account	Debit	Credit	Debit	Credit
Cash	$      43,507		$     43,507
Accounts Receivable	$      39,200		$     39,200
Prepaid rent	$        8,450		$       8,450
Supplies	$           110		$          110
Accounts Payable		$          197		$          197
Salaries Payable		$       2,200		$       2,200
Common Stock		$     54,000		$     54,000
Dividend	$           600
Retained Earning				$     34,870
Service Revenue		$     82,000
Rent Expense	$        7,150
Salaries Expense	$      38,700
Supplies Expense	$           680
Total	$   138,397	$   138,397	$     91,267	$     91,267

Part e Closing Entries:
Date	Account	Debit	Credit
c1	Service Revenue	$ 82,000
	Income Summary		$ 82,000
	(To close service revenue)
c2	Income Summary	$ 46,530
	Rent Expense		$    7,150
	Salaries Expense		$ 38,700
	Supplies Expense		$       680
	(To close expense account)
c3	Income Summary	$ 35,470
	Retained earning		$ 35,470
	(To close income summary account)
c4	Retained earning	$       600
	Dividend		$       600
	(To close dividend account)

Service Revenue
Debit		Credit
c1	$ 82,000	Aug 15	$ 10,200
		Sep 15	$    3,300
		Nov 16	$ 38,500
		Dec 31	$ 30,000
		Ending Balance	$          -
Rent Expense
Debit		Credit
Dec 31	$    7,150	c2	$    7,150
Ending Balance	$          -
Salaries expense
Debit		Credit
Oct 1	$ 36,500	c2	$ 38,700
Dec 31	$    2,200
Ending Balance	$          -
Supplies expense
Debit		Credit
Dec 31	$       680	c2	$       680
Ending Balance	$          -
Retained Earning
Debit		Credit
c2	$ 46,530	c1	$ 82,000
c4	$       600
		Ending Balance	$ 34,870