Question

How do I prepare a post-closing trial balance only? Part F ONLY.

ACC 111
Accounting Cycle Review

Jannero Pargo opened Pargo's Cleaning Service on July 1, 2017. During July the following transactions were completed.
July 1 Pargo invested $20,000 cash in the business.
1 Purchased used truck for $9,000, paying $4,000 cash and the balance on account.
3 Purchased cleaning supplies for $2,100 on account.
5 Paid $1,800 cash on one-year insurance policy effective July 1.
12 Billed customers $4,500 for cleaning services.
18 Paid $1,500 cash on amount owed on truck and $1,400 on amount owed on cleaning supplies.
20 Paid $2,500 cash for employee salaries.
21 Collected $3,400 cash from customers billed on July 12.
25 Billed customers $6,000 for cleaning services.
31 Paid gasoline for month on truck $350.
31 Withdraw $5,600 cash for personal use.

The chart of accounts for Pargo's Cleaning Service contains the following accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 128 Supplies, No. 130 Prepaid Insurance, No. 157 Equipment, No. 158 Accumulated Depreciation—Equipment, No. 201 Accounts Payable, No. 212 Salaries and Wages Payable, No. 301 Owner's Capital, No. 306 Owner's Drawings, No. 350 Income Summary, No. 400 Service Revenue, No. 633 Gasoline Expense, No. 634 Supplies Expense, No. 711 Depreciation Expense, No. 722 Insurance Expense, and No. 726 Salaries and Wages Expense.
Instructions
(a) Journalize and post the July transactions. Use page J1 for the journal and the three-column form of account.
(b) Prepare a trial balance at July 31.
Check figure: Trial balance $34,700
(c) Journalize and post the following adjusting entries.

1. Services provided but unbilled and uncollected at July 31 were $2,700.
2. Depreciation on equipment for the month was $500.
3. One-twelfth of the insurance expired.
4. An inventory count shows $600 of cleaning supplies on hand at July 31.
5. Accrued but unpaid employee salaries were $1,000.

Check figure - Adjusted trial balance $38,900
(d) Prepare the income statement and owner's equity statement for July and a classified balance sheet at July 31.
Check figures: Net income $7,200;
Total assets $26,800

(e) Journalize and post closing entries and complete the closing process. Use page J3 for the journal.
(f) Prepare a post-closing trial balance at July 31.
Check figure: Post-closing trial balance $27,300

Answer 1

• All working forms part of the answer
• Question specifically asks for PART – F of question, which is the Post Closing Trial Balance.
• Hence, assumed that every step before that have been done already.
• Before Closing entries have been passed, the Adjusted Trial balance would be looking like this---

Accounts titles	Debit	Credit
Cash	$    6,250.00
Owners' Capital		$ 20,000.00
Truck	$    9,000.00
Accounts payable		$    4,200.00
Supplies	$        600.00
Prepaid Insurance	$    1,650.00
Insurance expense	$        150.00
Service Revenue		$ 13,200.00
Accounts receivables	$    9,800.00
Salaries & Wages expense	$    3,500.00
Gasoline expense	$        350.00
Owner's Drawings	$    5,600.00
Depreciation expense	$        500.00
Accumulated Depreciation		$        500.00
Cleaning Supplies expense	$    1,500.00
Salaries & Wages payable		$    1,000.00
TOTAL	$ 38,900.00	$ 38,900.00

• Post Closing Trial Balance requires revenues and expenses and withdrawals accounts to be closed by transferring it to Owner’s capital account.

Owner's Capital [Beginning Balance]		$ 20,000.00
Service Revenue	$ 13,200.00
(-) Expenses
Insurance expense	$        150.00
Salaries & Wages expense	$    3,500.00
Gasoline expense	$        350.00
Depreciation expense	$        500.00
Cleaning Supplies expense	$    1,500.00
Net Income		$    7,200.00
Less: Owner's Drawings		$    5,600.00
Ending Owner's Capital Balance in Post closing Trial Balance		$ 21,600.00

• Post Closing Balance Trial Balance, as asked

Accounts titles	Debit	Credit
Cash	$   6,250.00
Owners' Capital		$ 21,600.00
Truck	$    9,000.00
Accounts payable		$    4,200.00
Supplies	$        600.00
Prepaid Insurance	$    1,650.00
Insurance expense	$                 -
Service Revenue		$                 -
Accounts receivables	$    9,800.00
Salaries & Wages expense	$                 -
Gasoline expense	$                 -
Owner's Drawings	$                 -
Depreciation expense	$                 -
Accumulated Depreciation		$        500.00
Cleaning Supplies expense	$                 -
Salaries & Wages payable		$    1,000.00
TOTAL	$ 27,300.00	$ 27,300.00

• The total of Post Closing Trial Balance matches with that given in the Answer