Question

1. Closing Entries and Post-Closing Trial Balance for 12/31/16

Additional information: The equipment is being depreciated on a straight-line basis over a 10-year life, with no residual value. Salaries accrued but not recorded total $500 On 1/1/16, the company had paid 3 years’ rent in advance at $100 per month Bad debts are expected to be 1% of total sales Interest of $400 has accrued on the note payable The income tax rate is 40% on current income and will be paid in the first quarter of 2017

Accounts	Debit	Credit
Cash	2500
Accounts Receivable	4000
Allowance for Doubtful Accounts		300
Inventory	8200
Prepaid Rent	3600
Equipment	30000
Accumulated Depreciation		12000
Accounts Payable		3700
Note Payable (due 7/1/17)		5000
Common Stock (1,000 shares)		8900
Retained Earnings (1/1/16		10200
Dividends	1000
Sales Revenues		45000
Cost of Goods Sold	21000
Salaries Expense	7100
Utilities Expenses	3300
Advertising Expense	4400
Totals	85,100	85,100

Answer 1

Particluars	Debit	Credit
Depreciation	$    3,000.00
Accumalated Depreciation		$    3,000.00
Salaries Expenses	$        500.00
Salaries Payable		$        500.00
Rent expenses	$    1,200.00
Rent Payable		$    1,200.00
Bad Debts	$        150.00
Allowance for Bad Debts		$        150.00
Interest Expnses	$        400.00
Interesr Payable		$        400.00
Income tax Expenses (Working 1)	$    1,580.00
IncomeTax Payable		$    1,580.00
Patriculars	Debit	Credit
Cash	$    2,500.00
Accounts Recivable	$    4,000.00
Allowance for Doubtful Debts		$        450.00
Inventory	$    8,200.00
Prepaid Rent	$    2,400.00
Equipment	$ 30,000.00
Accumalated Depreciation		$ 15,000.00
Accounts Payable		$    3,700.00
Notes Payable		$    5,000.00
Common Stock		$    8,900.00
Retained Earning		$ 10,200.00
Dividen	$    1,000.00
Sales Revenue		$ 45,000.00
Cost of Goods Sold	$ 21,000.00
Salaries Expenses	$    7,600.00
Utilites Expenses	$    3,300.00
Advertsing Expenses	$    4,400.00
Bad Debt Expenses	$        150.00
Rent Expenses	$    1,200.00
Depreciation	$    3,000.00
Interest Expense	$        400.00
Income tax @ 40%	$    1,580.00
Interest Payable		$        400.00
Income Tax Payable		$    1,580.00
Salaries Payable		$        500.00
Total	$ 90,730.00	$ 90,730.00

Working 1	Sales Revenue	$ 45,000.00
Less	Cost of Goods Sold	$ 21,000.00
Less	Salaries Expenses	$    7,600.00
Less	Utilites Expenses	$    3,300.00
Less	Advertsing Expenses	$    4,400.00
Less	Bad Debt Expenses	$        150.00
Less	Rent Expenses	$    1,200.00
Less	Depreciation	$    3,000.00
Less	Interest Expense	$        400.00
	Net Income	$    3,950.00
	Income tax @ 40% of Net Income	$    1,580.00