Question

Use the following information to answer Exercises E5-23 through ES-25. The adjusted trial balance of Quality Office Systems at March 31, 2018, follows: QUALITY OFFICE SYSTEMS Adjusted Trial Balance March 31, 2018 Account Title Cash Balance Debit Credit $ 3.700 13.300 31,500 6,300 42,900 $ 13,900 9.200 800 8,600 Accounts Receivable Merchandise Inventory Office Supplies Equipment Accumulated Depreciation Equipment Accounts Payable Salaries Payable Notes Payable, long-term Common Stock Retained Earnings Dividends Sales Revenue Cost of Goods Sold Selling Expense Administrative Expense Interest Expense Total 18,000 4,950 41,500 235,700 107,550 27,400 14,200 2.800 $ 291,150 $ 291,150 E5-23 Journalizing closing entries Requirements 1. Journalize the required closing entries at March 31, 2018 2. Set up T-accounts for Income Summary: Retained Earnings, and Dividends. Post the closing entries to the T-accounts, and calculate their ending balances. 3. How much was Quality Office's net income or net loss? E5-24 Preparing a single-step income statement Prepare Quality Office's single-step income statement for the year ended March 31, 2018. E5-25 Preparing a multi-step income statement Prepare Quality Office's multi-step income statement for the year ended March 31, 2018

Answer 1

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Quality Office Systems						Answer 2
Answer 1						Posting closing entries
Closing entries						Income summary
All expense and income accounts will be closed to income summary account.						Date	Account	Debit $	Date	Account	Credit $
Then income summary account will be closed to Retained Earnings account.						March 31 2018	Cost of good sold	107,550.00	March 31 2018	Sales Revenue	235,700.00
Journal Entry						March 31 2018	Selling Expense	27,400.00
Account	Debit $	Credit $				March 31 2018	Administrative Expense	14,200.00
Sales Revenue	235,700.00					March 31 2018	Interest Expense	2,800.00
Income summary		235,700.00				March 31 2018	Retained Earnings	83,750.00
								235,700.00			235,700.00
Income summary	151,950.00
Cost of good sold		107,550.00				Dividend
Selling Expense		27,400.00				Date	Account	Debit $	Date	Account	Credit $
Administrative Expense		14,200.00				March 31 2018	Opening Balance	41,500.00	March 31 2018	Retained Earnings	41,500.00
Interest Expense		2,800.00						41,500.00			41,500.00
Income summary	83,750.00					Retained Earnings
Retained Earnings		83,750.00				Date	Account	Debit $	Date	Account	Credit $
						March 31 2018	Dividends	41,500.00	March 31 2018	Opening Balance	4,950.00
Retained Earnings	41,500.00					March 31 2018	Closing Balance	47,200.00	March 31 2018	Income summary	83,750.00
Dividends		41,500.00						88,700.00			88,700.00
									April 1 2018	Opening Balance	47,200.00
Answer 3	The net income is $ 83,750.
Answer E5-24	Amount $
Single step Income Statement
Sales	235,700.00
Lees: Cost of good sold	107,550.00
Gross Profit	128,150.00
Lees: Expenses
Selling Expense	27,400.00
Administrative Expense	14,200.00
Interest Expense	2,800.00
Net income	83,750.00
Answer E5-25
Multi step Income Statement		Amount $
Sales		235,700.00
Lees: Cost of good sold		107,550.00
Gross Profit		128,150.00
Lees: Operating Expenses
Selling Expense		27,400.00
Administrative Expense		14,200.00
Income from operations before interest & taxes		86,550.00
Less: Interest Expense		2,800.00
Net income		83,750.00