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Thunderduck Car Repair      Post-Closing Trial Balance      December 31, 2XX1             Debit   Credit...

Thunderduck Car Repair  
   Post-Closing Trial Balance  
   December 31, 2XX1  
      
   Debit   Credit
Cash   4.965  
Accounts receivable   2.150  
Supplies   870  
Prepaid rent   850  
Building   79.000  
Equipment   119.500  
Accumlated depreciation       37.500
Accounts payable       5.875
Utilities payable       710
Salaries and wages payable       2.235
income tax payable       5.890
Notes payable       31.400
Common stock       95.000
Retained Earnings       28.725
Total   207.335   207.335

January Transactions

1-thg 1 Performed car repair services and received cash at the time of sale, $4,350.

2-thg 1 Paid for the car parts purchased on account last year, $790.

4-thg 1 Paid wages and salaries for $2,575, part of which was accrued in December.

10-thg 1 Paid the utility bill that was already accrued in December in utilities payable.

16-thg 1 Collected cash from credit sales made last year, $1,800.

20-thg 1 Purchased $4,500 of equipment, paid $2,250 cash and issued a note for $2,250.

22-thg 1 Performed car repair services on account, $3,940.

27-thg 1 Paid dividends to the company's owners, $300.

January Adjusting Entries

31-thg 1 The estimated depreciation on building and equipment is $770.

31-thg 1 One month of rent has expired, $850.

31-thg 1 The annual interest rate is 4% on all notes and paid quarterly. It was last paid on Dec 31 of the prior year. Round to the nearest dollar.

31-thg 1 The supplies remaining at the end of the month was $680.

31-thg 1 Accrued wages and salaries worked in January that will be paid 2-4, $1,790.

31-thg 1 The estimated income taxes for the month is $655.

  • Prepare the following January financial statements:
    • a) Income Statement for month ended January 31
    • b) Statement of Stockholders Equity for month ended January 31
    • c) Balance Sheet as of January 31
    • d) Statement of Cash Flows for month ended January 31
  • Record January closing transactions in the General Journal and post to the General Ledger.
  • Prepare a post-closing trial balance as of January 31.

Solutions

Expert Solution

Note:

1. Financial statements are prepared based on adjusted trial balance figures. Adjusted trial balance figures taken from the ledger accounts before posting the closing entries.

2- Interest expense on Notes payable is $ 107 = (31400*4%*1/12)+(2250*4%*1/12*11/31), [Note payable beginning of $ 31400 and issue $ 2250 on January 20, hence first note is held for complete month, but second note is held only for 10 days in the January month.

3- Supplies expense = $ 190 [870-190]

ekkarill92 answered 2 years ago
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