Question

The adjusted trial balance shown below is for Gordon Real Estate at the end of its reporting period 30 June 2019.

	Debit $	Credit $
Cash at bank	11440
Accounts receivable	10340
Office supplies	770
Prepaid insurance	2750
Office equipment	15400
Accumulated depreciation—office equipment		5280
Accounts payable		3680
Salaries payable		1200
Rent revenue received in advance		750
Gordon, Capital		17820
Gordon, Drawings	650
Service revenue		38000
Rent revenue		12000
Salaries expense	19200
Office supplies expense	1700
Rent expense	14500
Insurance expense	1100
Depreciation expense—office equipment	880
	78730	78730

Required

a)     Prepare the required closing entries for Gordon Real Estate for the year ended 30 June 2019. Narrations are required.

b)    Prepare Gordon’s Capital account using the T-account provided below.

  Gordon, Capital

Date	Explanation	Amount $	Date	Explanation	Amount $

Answer 1

Journal entry
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Service revenue			38000
	Rent revenue			12,000
	Income summary				50000
	(for closing the revenues)
b.	Income Summary			37380
	Salaries expense				19200
	Office Supplies expense			1700
	Rent expenses				14500
	Insurance expense				1100
	Depreciation expense			880
	(for closing the expense)
c.	Income Summary			12620
	Gordon capital				12620
	(for closing the income summary)
d.	Gordon Capital			650
	Gordon Drawings				650
	(for closing the withdrawls)
GORDON CAPITAL
Gordon Drawings	650	Beginning balance	17820
			Income Summary	12620
			Ending balance	29790