Question

oxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 20Y8, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

Foxy Investigative Services
End-of-Period Spreadsheet
For the Year Ended November 30, 20Y8
	~	Adjusted Trial Balance
Account Title	~	Dr.	Cr.
	~
Cash	~	28,000
Accounts Receivable	~	70,000
Supplies	~	4,600
Prepaid Insurance	~	2,500
Building	~	434,000
Accumulated Depreciation-Building	~		41,400
Accounts Payable	~		11,600
Salaries Payable	~		3,000
Unearned Rent	~		1,800
Common Stock	~		80,000
Retained Earnings	~		294,400
Dividends	~	11,900
Service Fees	~		716,650
Rent Revenue	~		11,900
Salaries Expense	~	523,900
Rent Expense	~	47,600
Supplies Expense	~	10,800
Depreciation Expense-Building	~	9,000
Utilities Expense	~	7,250
Repairs Expense	~	2,800
Insurance Expense	~	2,800
Miscellaneous Expense	~	5,600
	~	1,160,750	1,160,750

	Required:
1.	A. Prepare an income statement for the year ended November 30, 20Y8. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. B. Prepare a statement of stockholders’ equity for the year ended November 30, 20Y8. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. C. Prepare a balance sheet as of November 30, 20Y8. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2.	Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.
3.	If Retained Earnings had instead decreased $31,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.

Answer 1

OXY Investigative Services
Income Statement
For the period Nov. 30, 20Y8 (amounts in $)
service fees	716650
rent revenue	11900
total revenue		728550
less operating expenses
Salaries Expense	523900
Rent Expense	47600
Supplies Expense	10800
Depreciation Expense-Building	9000
Utilities Expense	7250
Repairs Expense	2800
Insurance Expense	2800
Miscellaneous Expense	5600
total expenses		609750
net income		118800
OXY Investigative Services
Stockholders Equity Statement
As of Nov. 30, 20Y8 (amounts in $)
common stock	80000
retained earnings
beginning balance	294400
add net income	118800
less dividend	-11900
ending stockholders equity	481300
OXY Investigative Services
Balance Sheet
As of Nov. 30, 20Y8 (amounts in $)
assets
current assets
Cash	28000
Accounts Receivable	70000
Supplies	4600
Prepaid Insurance	2500
total current assets		105100
non current assets
Building	434000
accumulated depreciation	-41400	392600
total assets		497700
liabilities and stockholders equity
liabilities
current liabilities
Accounts Payable	11600
Salaries Payable	3000
Unearned Rent	1800
total liabilities		16400
stockholders equity
common stock	80000
retained earnings	401300
total stockholders equity		481300
total liabilities and stockholders equity		497700

Nov.	Closing Journal Entries	Dr. ($)	Cr. ($)
30	service fees	716650
	rent revenue	11900
	To income summary		728550
	(closing of income accounts to income summary account)
30	income summary	609750
	To Salaries Expense		523900
	To Rent Expense		47600
	To Supplies Expense		10800
	To Depreciation Expense-Building		9000
	To Utilities Expense		7250
	To Repairs Expense		2800
	To Insurance Expense		2800
	To Miscellaneous Expense		5600
	(closing of expenses accounts to income summary account)
30	retained earnings	11900
	To dividends		11900
	(closing of dividend account to retained earnings)
30	income summary	118800
	To retained earnings		118800
	(closing income summary account to retained earnings)