Question

ElecBooks Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts and amounts reported in its accounting records. The accounts have normal debit or credit balances. Amounts in the list of accounts are rounded to the nearest thousand dollars. Assume the year ended on September 30, 2017.

Accounts Payable	$	233
Accounts Receivable		195
Accrued Liabilities		358
Accumulated Depreciation		304
Cash		311
Contributed Capital		155
Depreciation Expense		344
General and Administrative Expenses		361
Income Tax Expense		306
Interest Revenue		96
Long-Term Debt		200
Other Current Assets		75
Other Long-Lived Assets		473
Other Operating Expenses		201
Prepaid Expenses		98
Property and Equipment		2,154
Retained Earnings		1,457
Selling Expenses		2,617
Service Revenues		6,409
Short-Term Bank Loan		480
Store Operating Expenses		2,178
Supplies		558
Deferred Revenue		179

Required:
1-a. Prepare an adjusted trial balance at September 30, 2017. (Enter your answers in thousands.)

1-b. Is the Retained Earnings balance of $1,457 the amount that would be reported on the balance sheet as of September 30, 2017?

• Yes

• No

2. Prepare the closing entry required at September 30, 2017. (Enter your answers in thousands. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3.Prepare a post-closing trial balance at September 30, 2017. (Enter your answers in thousands.)

Answer 1

Elec Books Corporation
Answer 1 a
Account Titles	Debit $	Credit $
Accounts Payable		233.00
Accounts Receivable	195.00
Accrued Liabilities		358.00
Accumulated Depreciation		304.00
Cash	311.00
Contributed Capital		155.00
Depreciation Expense	344.00
General and Administrative Expenses	361.00
Income Tax Expense	306.00
Interest Revenue		96.00
Long-Term Debt		200.00
Other Current Assets	75.00
Other Long-Lived Assets	473.00
Other Operating Expenses	201.00
Prepaid Expenses	98.00
Property and Equipment	2,154.00
Retained Earnings		1,457.00
Selling Expenses	2,617.00
Service Revenues		6,409.00
Short-Term Bank Loan		480.00
Store Operating Expenses	2,178.00
Supplies	558.00
Deferred Revenue		179.00
Total	9,871.00	9,871.00
Workings for answer 1 b
Income Statement	Amount $	Amount $
Service Revenues	6,409.00
Interest Revenue	96.00
Total Revenue		6,505.00
Less: Operating Expenses
Depreciation Expense	344.00
General and Administrative Expenses	361.00
Other Operating Expenses	201.00
Selling Expenses	2,617.00
Store Operating Expenses	2,178.00
Total Operating Expenses		5,701.00
Income before tax		804.00
Less : Income Tax Expense		306.00
Net Income		498.00
Answer 1 b- No.
Statement of Retained Earnings	Amount $
Opening Balance	1,457.00
Add: Net Income	498.00
Retained Earnings balance to be reported on the balance sheet as of September 30, 2017	1,955.00
Answer 1 c
Closing Entries
Account	Debit $	Credit $
Service Revenues	6,409.00
Interest Revenue	96.00
Income Summary		6,505.00
Income Summary	6,007.00
Depreciation Expense		344.00
General and Administrative Expenses		361.00
Other Operating Expenses		201.00
Selling Expenses		2,617.00
Store Operating Expenses		2,178.00
Income Tax Expense		306.00
Income Summary	498.00
Retained Earnings		498.00
Answer 1 d
Post Closing Trial Balance
Account Titles	Debit $	Credit $
Accounts Payable		233.00
Accounts Receivable	195.00
Accrued Liabilities		358.00
Accumulated Depreciation		304.00
Cash	311.00
Contributed Capital		155.00
Long-Term Debt		200.00
Other Current Assets	75.00
Other Long-Lived Assets	473.00
Prepaid Expenses	98.00
Property and Equipment	2,154.00
Retained Earnings		1,955.00
Short-Term Bank Loan		480.00
Supplies	558.00
Deferred Revenue		179.00
Total	3,864.00	3,864.00