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complete all parts of the question thanks Financial Statements and Closing Entries The Gorman Group is...

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?
$

Solutions

Expert Solution

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

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