In: Accounting
The adjusted trial balance shown below is for Greenwood Real Estate at the end of its reporting period 30 June 2019.
Debit $ |
Credit $ |
|
Cash at bank |
10400 |
|
Accounts receivable |
9400 |
|
Office supplies |
600 |
|
Prepaid insurance |
2500 |
|
Office equipment |
14000 |
|
Accumulated depreciation—office equipment |
4800 |
|
Accounts payable |
3800 |
|
Salaries payable |
2000 |
|
Rent revenue received in advance |
600 |
|
Greenwood, Capital |
16200 |
|
Greenwood, Drawings |
700 |
|
Service revenue |
35600 |
|
Rent revenue |
12000 |
|
Salaries expense |
28000 |
|
Office supplies expense |
1700 |
|
Utility expense |
5000 |
|
Insurance expense |
1500 |
|
Depreciation expense—office equipment |
1200 |
|
75000 |
75000 |
Required
a) Prepare the required closing entries for Greenwood Real Estate for the year ended 30 June 2019. Narrations are required.
b) Prepare Greenwood’s Capital account using the T-account provided below. (Total 15 Marks)
Greenwood, Capital
Date |
Explanation |
Amount $ |
Date |
Explanation |
Amount $ |
Solution a:
Greenwood Real Estate - Journal Entries | |||
Date | Particulars | Debit | Credit |
30-Jun-19 | Service revenue Dr | $35,600.00 | |
Rent Revenue Dr | $12,000.00 | ||
To Income summary | $47,600.00 | ||
(To close revenue account) | |||
30-Jun-19 | Income summary Dr | $37,400.00 | |
To Salaries expense | $28,000.00 | ||
To Office Supplies Expense | $1,700.00 | ||
To Utility Expense | $5,000.00 | ||
To Insurance Expense | $1,500.00 | ||
To Depreciation Expense - Office equipment | $1,200.00 | ||
(To close expense account) | |||
30-Jun-19 | Income summary Dr | $10,200.00 | |
To Greenwood Capital | $10,200.00 | ||
(To close income to Capital) | |||
30-Jun-19 | Greenwood capital Dr | $700.00 | |
To Greenwood Drawings | $700.00 | ||
(To close drawing account) |
Solution b:
Greenwood Capital | |||||
Date | Explanation | Amount | Date | Explanation | Amount |
30-Jun | Drawings | $700.00 | 30-Jun | Beginning Balance | $16,200.00 |
30-Jun | Income summary | $10,200.00 | |||
30-Jun | Ending balance | $25,700.00 |