Question

Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows: Foxy Investigative Services End-of-Period Spreadsheet For the Year Ended November 30, 2018 ~ Adjusted Trial Balance Account Title ~ Dr. Cr. ~ Cash ~ 27,500 Accounts Receivable ~ 71,800 Supplies ~ 3,550 Prepaid Insurance ~ 750 Building ~ 330,500 Accumulated Depreciation-Building ~ 184,100 Accounts Payable ~ 16,100 Salaries Payable ~ 6,600 Unearned Rent ~ 1,500 Common Stock ~ 40,000 Retained Earnings ~ 70,300 Dividends ~ 30,000 Service Fees ~ 675,500 Rent Revenue ~ 9,000 Salaries Expense ~ 435,000 Rent Expense ~ 55,000 Supplies Expense ~ 11,850 Depreciation Expense-Building ~ 10,000 Utilities Expense ~ 8,800 Repairs Expense ~ 4,250 Insurance Expense ~ 3,000 Miscellaneous Expense ~ 11,100 ~ 1,003,100 1,003,100 Required: 1. A. Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles. B. Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. C. Prepare a balance sheet as of November 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word "Less" on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign. 2. Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles. 3. If Retained Earnings had instead decreased $46,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss. figure out the journal

Answer 1

first we will tabulate the trial balalnce sheet in excel sheet as below

Foxy Investigative Services
End-of-Period Spreadsheet
For the Year Ended November 30, 2018
	~	Adjusted Trial Balance
Account Title	~	Dr.	Cr.
	~
Cash	~	27,500
Accounts Receivable	~	71,800
Supplies	~	3,550
Prepaid Insurance	~	750
Building	~	330,500
Accumulated Depreciation-Building	~		184,100
Accounts Payable	~		16,100
Salaries Payable	~		6,600
Unearned Rent	~		1,500
Common Stock	~		40,000
Retained Earnings	~		70,300
Dividends	~	30,000
Service Fees	~		675,500
Rent Revenue	~		9,000
Salaries Expense	~	435,000
Rent Expense	~	55,000
Supplies Expense	~	11,850
Depreciation Expense-Building	~	10,000
Utilities Expense	~	8,800
Repairs Expense	~	4,250
Insurance Expense	~	3,000
Miscellaneous Expense	~	11,100
	~	1,003,100	1,003,100

now we will prepare the income statement based on trial balance above in income statement all income and exoense accounts are taken to arrive at net income or net loss . the income statement is prepared below

Foxy Investigative Services
Income statement
for the year ended ,November 30, 2018
Revenues
	Service Fees		675,500
	Rent Revenue		9,000
	Total revenues			684,500
Expenses
	Salaries Expense		435000
	Rent Expense		55000
	Supplies Expense		11850
	Depreciation Expense-Building		10000
	Utilities Expense		8800
	Repairs Expense		4250
	Insurance Expense		3000
	Miscellaneous Expense		11100
	Total expenses			539000
Net income				145,500

income After preparation of income statement the reatined earning statement is prepared as under

Foxy Investigative Services
Retained Earning statement statement
for the year ended ,November 30, 2018
Retained earnings, December 1, 2017					70,300
Net income				145,500
Dividends				-30000
Change in retained earnings					115,500
Retained earnings, November 30, 2018					185,800

After preaparing retained earnings statement balance sheet is prepared as under

Foxy Investigative Services
Retained Earning statement statement
30-Nov-18
ASSETS
Current assets
	Cash			27500
	Accounts Receivable			71800
	Supplies			3550
	Prepaid Insurance			750
	Total current assets				103600
Property, plant, and equipment
	Building			330,500
	Accumulated Depreciation-Building			-184,100
	Total property, plant, and equipment				146,400
Total assets					250,000
LIABILITIES
Current liabilities
	Accounts Payable			16,100
	Salaries Payable			6,600
	Unearned Rent			1,500
Total liabilities					24,200
stockholders’ equity
Common Stock				40,000
Retained Earnings				185,800
Total stockholders’ equity					225,800
Total liabilities and stockholders’ equity					250,000

now the closing entries are made in period close the nominal accounts are transferred to Profit & loss account

the closing journal entries are given below

Journal
Date	Description				Post Ref	Debit	Credit
30 nov,2018	Service Fees					675,500
	Rent Revenue					9,000
		Income summary					684,500
	(for transfer of income accounts to Profit & loss a/c)
30 nov,2018	Income summary					539000
		Salaries Expense					435000
		Rent Expense					55000
		Supplies Expense					11850
		Depreciation Expense-Building					10000
		Utilities Expense					8800
		Repairs Expense					4250
		Insurance Expense					3000
		Miscellaneous Expense					11100
	(for transfer of expense accounts to Profit & loss a/c)
30 nov,2018	Income summary					145500
		Retained earnings					145500
	(for transfer of net income to retained earning account)
30 nov,2018	Retained Earnings					30000
		Dividend					30000
	(for dividend paid from retained earning account)