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Below is an alphabetical list of the adjusted accounts of Sheridan Tour Company at its year...

Below is an alphabetical list of the adjusted accounts of Sheridan Tour Company at its year end, December 31, 2021. All accounts have normal balances.
Accounts payable $7,370 Interest receivable $100
Accounts receivable 3,570 Interest revenue 1,100
Accumulated depreciation—equipment 15,000 Notes payable 40,000
Cash 4,500 Notes receivable 18,430
Depreciation expense 10,000 Patents 15,070
Equipment 50,000 Prepaid insurance 2,900
F. Sheridan, capital 17,370 Service revenue 65,030
F. Sheridan, drawings 33,000 Short-term investments 2,700
Insurance expense 1,500 Supplies 3,100
Interest expense 2,830 Supplies expense 2,400
Interest payable 730 Unearned revenue 3,500


Additional information:
1. In 2022, $5,000 of the notes payable becomes due.
2. The note receivable is due in 2023.
3. On July 18, 2021, Fred Sheridan invested $3,200 cash in the business.

Prepare closing journal entries and calculate the post-closing balance in F. Sheridan, Capital on December 31, 2021.

Solutions

Expert Solution

Date Account Name Debit Credit
Dec-31 Interest revenue $     1,100
Service revenue $   65,030
Income summary $   66,130
(To close revenue accounts)
Dec-31 Income summary $   16,730
Depreciation expense $   10,000
Insurance expense $     1,500
Interest expense $     2,830
Supplies expense $     2,400
(To close expenditures)
Dec-31 Income summary ($66,130-$16,730) $   49,400
F. Sheridan, capital $   49,400
(To close income summary)
Dec-31 F. Sheridan, capital $   33,000
F. Sheridan, drawings $   33,000
(To close drawings)
F. Sheridan, capital, beginning balance $    17,370
Add: Net income $    49,400
Less: Drawings $ (33,000)
F. Sheridan, capital, ending balance $    33,770

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ekkarill92 answered 1 year ago
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