Question

Edwards Corporation operates hair salons under various brand names. The following is a simplified list of accounts and amounts (in millions) reported in the company’s accounts for the year ended June 30, 2013.

     

Accounts Payable	$	68
Accounts Receivable		57
Accumulated Amortization		38
Accumulated Depreciation—Equipment		77
Amortization Expense		19
Cash		198
Common Stock		380
Depreciation Expense		73
Equipment		680
Income Tax Expense		19
Interest Expense		38
Inventories		148
Note Payable (long-term)		154
Note Payable (short-term)		118
Office Expenses		190
Prepaid Rent		72
Rent Expense		320
Retained Earnings		620
Salaries and Wages Expense		520
Salaries and Wages Payable		158
Service Revenue		1,580
Software		730
Supplies Expense		129
Required: 2. 1.Prepare an adjusted trial balance at June 30, 2013 Prepare the closing entry required at June 30, 2013. (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 June 30, 2013.

Answer 1

Trail balance before Closing
	$ in Million
	Debit	Credit
Accounts Payable		$              68
Accounts Receivable	$              57
Accumulated Amortization		$              38
Accumulated Depreciation—Equipment		$              77
Amortization Expense	$              19
Cash	$           198
Common Stock		$           380
Depreciation Expense	$              73
Equipment	$           680
Income Tax Expense	$              19
Interest Expense	$              38
Inventories	$           148
Note Payable (long-term)		$           154
Note Payable (short-term)		$           118
Office Expenses	$           190
Prepaid Rent	$              72
Rent Expense	$           320
Retained Earnings		$           620
Salaries and Wages Expense	$           520
Salaries and Wages Payable		$           158
Service Revenue		$        1,580
Software	$           730
Supplies Expense	$           129
	$        3,193	$        3,193

1.

		$ in Million
Date	Account Description	Debit	Credit
1	Amortization Expense		$              19
	Depreciation Expense		$              73
	Income Tax Expense		$              19
	Interest Expense		$              38
	Office Expenses		$           190
	Rent Expense		$           320
	Salaries and Wages Expense		$           520
	Supplies Expense		$           129
	Income Summary	$        1,308
	(Being Expenses transferred to Income Summary )
2	Service Revenue	$        1,580
	Income Summary		$        1,580
	(Being Revenue transferred to Income Summary )
3	Income Summary	$           272
	Retained Earnings		$           272
	(being Balance in Income Summary transferred to Retained Earnings)

2.

Trial balance Post Closing
	$ in Million
	Debit	Credit
Accounts Payable		$              68
Accounts Receivable	$              57
Accumulated Amortization		$              38
Accumulated Depreciation—Equipment		$              77
Cash	$           198
Common Stock		$           380
Equipment	$           680
Inventories	$           148
Note Payable (long-term)		$           154
Note Payable (short-term)		$           118
Prepaid Rent	$              72
Retained Earnings		$           892
Salaries and Wages Payable		$           158
Software	$           730
	$        1,885	$        1,885

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