In: Accounting
complete all parts of the question thanks
Financial Statements and Closing Entries
The Gorman Group is a financial planning services firm owned and
operated by Nicole Gorman. As of October 31, 2019, the end of the
fiscal year, the accountant for The Gorman Group prepared an
end-of-period spreadsheet, part of which follows:
The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 2019 |
||
Adjusted Trial Balance | ||
Account Title | Dr. | Cr. |
Cash | $12,910 | |
Accounts Receivable | 28,100 | |
Supplies | 4,390 | |
Prepaid Insurance | 9,480 | |
Land | 100,000 | |
Buildings | 359,000 | |
Accumulated Depreciation-Buildings | 116,900 | |
Equipment | 259,000 | |
Accumulated Depreciation-Equipment | 152,300 | |
Accounts Payable | 33,230 | |
Salaries Payable | 3,290 | |
Unearned Rent | 1,490 | |
Nicole Gorman, Capital | 426,230 | |
Nicole Gorman, Drawing | 24,900 | |
Service Fees | 473,900 | |
Rent Revenue | 5,000 | |
Salaries Expense | 339,740 | |
Depreciation Expense—Equipment | 18,400 | |
Rent Expense | 15,500 | |
Supplies Expense | 10,930 | |
Utilities Expense | 9,880 | |
Depreciation Expense—Buildings | 6,590 | |
Repairs Expense | 5,440 | |
Insurance Expense | 2,990 | |
Miscellaneous Expense | 5,090 | |
1,212,340 | 1,212,340 |
Required:
1. Prepare an income statement.
Gorman Group Income Statement For the Year Ended October 31, 2019 |
||
---|---|---|
Revenues: | ||
$ | ||
Total revenues | $ | |
Expenses: | ||
$ | ||
Total expenses | ||
Net income | $ |
Prepare a statement of owner's equity (no additional investments were made during the year.)
Gorman Group Statement of Owner's Equity For the Year Ended October 31, 2019 |
||
---|---|---|
$ | ||
$ | ||
$ |
Prepare a balance sheet.
Gorman Group Balance Sheet October 31, 2019 |
|||||||
---|---|---|---|---|---|---|---|
Assets | Liabilities | ||||||
Current assets: | Current liabilities: | ||||||
$ | $ | ||||||
Total liabilities | $ | ||||||
Total current assets | $ | ||||||
Property, plant, and equipment: | Owner's Equity | ||||||
$ | |||||||
Total property, plant, and building | |||||||
Total assets | $ | Total liabilities and owner's equity | $ |
2. Journalize the entries that were required to close the accounts at October 31. For a compound transaction, if an amount box does not require an entry, leave it blank.
Date | Account | Debit | Credit |
---|---|---|---|
Oct. 31 | |||
Oct. 31 | |||
3. If the balance of Nicole Gorman, Capital had
instead increased $115,000 after the closing entries were posted
and the withdrawals remained the same, what would have been the
amount of net income or net loss?
$
Gorman Group Income Statement For the year ended October 31, 2019 | |||||
Particulars | Amount | Amount | |||
Revenues:- | |||||
Service Fees | $ 4,73,900.00 | ||||
Rent Revenue | $ 5,000.00 | ||||
Total Income | $ 4,78,900.00 | ||||
Expenses:- | |||||
Salaries | $ 3,39,740.00 | ||||
Supplies | $ 4,390.00 | ||||
Depreciation - Equipment | $ 18,400.00 | ||||
Rent | $ 15,500.00 | ||||
Supplies expenses | $ 10,930.00 | ||||
Utilities expenses | $ 9,880.00 | ||||
Depreciation - Building | $ 6,590.00 | ||||
Repairs Expenses | $ 5,440.00 | ||||
Insurance expenses | $ 2,990.00 | ||||
Misc Expenses | $ 5,090.00 | ||||
Total Expenses | $ 4,18,950.00 | ||||
Profit | $ 59,950.00 | ||||
Gorman Group Statement of Owners Equity For the year ended October 31, 2019 | |||||
Particulars | Amount | Amount | |||
Nicole Gorman Capital | $ 4,26,230.00 | ||||
(+) Profit | $ 59,950.00 | ||||
(-) Drawings | $ -24,900.00 | ||||
Ending capital | $ 4,61,280.00 | ||||
Gorman Group | |||||
Balancesheet | |||||
October 31, 2019 | |||||
Assets | Amount | Amount | Liabilities | Amount | Amount |
Current Assets:- | Current Liabilities | ||||
Cash | $ 12,910.00 | Accounts Payable | $ 33,230.00 | ||
Accounts Receivable | $ 28,100.00 | Salaries payable | $ 3,290.00 | ||
Prepaid Insurance | $ 9,480.00 | Unearned rent | $ 1,490.00 | ||
Total Current Assets | $ 50,490.00 | Total Current Liabilities | $ 38,010.00 | ||
Property, Plant and Equipment | Owners Equity | $ 4,61,280.00 | |||
Land | $ 1,00,000.00 | ||||
Buildings | $ 3,59,000.00 | ||||
Equipment | $ 2,59,000.00 | ||||
Accumulated Dep - Building | $ -1,16,900.00 | ||||
Accumulated Dep - Equipment | $ -1,52,300.00 | ||||
Total Property, plant and equipment | $ 4,48,800.00 | ||||
Total Assets | $ 4,99,290.00 | Total Liabilities and owners equity | $ 4,99,290.00 | ||
Journal | |||||
Oct 31 - Depreciation Building | |||||
Depreciation on Building A/c Dr | $ 6,590.00 | ||||
To Depreciation A/c | $ 6,590.00 | ||||
Oct 31 - Depreciation Equipment | |||||
Depreciation on Equipment A/c Dr | $ 18,400.00 | ||||
To Depreciation A/c | $ 18,400.00 | ||||
Oct 31- Profit Transfer to capital | $ 59,950.00 | ||||
Profit A/c Dr | $ 59,950.00 | ||||
To Capital A/c |