Question

The unadjusted trial balance of PS Music as of July 31, 2018, along with the adjustment data for the two months ended July 31, 2018, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared:

PS Music

ADJUSTED TRIAL BALANCE

July 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	9,945.00
2	Accounts Receivable	4,150.00
3	Supplies	275.00
4	Prepaid Insurance	2,475.00
5	Office Equipment	7,500.00
6	Accumulated Depreciation-Office Equipment		50.00
7	Accounts Payable		8,350.00
8	Wages Payable		140.00
9	Unearned Revenue		3,600.00
10	Common Stock		9,000.00
11	Dividends	1,750.00
12	Fees Earned		21,200.00
13	Wages Expense	2,940.00
14	Office Rent Expense	2,550.00
15	Equipment Rent Expense	1,375.00
16	Utilities Expense	1,215.00
17	Music Expense	3,610.00
18	Advertising Expense	1,500.00
19	Supplies Expense	925.00
20	Insurance Expense	225.00
21	Depreciation Expense	50.00
22	Miscellaneous Expense	1,855.00
23	Totals	42,340.00	42,340.00

Required:

1.	(Optional) Using the data from Chapter 3, prepare an end-of-period spreadsheet on a sheet of paper or using spreadsheet software.
2.	Prepare an income statement, a retained earnings statement, and a balance sheet.*
3.	A. Journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles. B. Post the closing entries. The income summary account is #34 in the ledger of PS Music. Indicate closed accounts by inserting a 0 (zero) in either of the Balance columns opposite the closing entry. No entry is required in the Item column.
4.	Prepare a post-closing trial balance. * For guidance in completing the financial statements, be sure to read the instructions above each statement carefully.

Answer 1

Adjusted Trail balance
particulars		Dr	Cr	Dr	Cr
cash		$   9,945.00		$   9,945.00
accounts receivable		$   4,150.00		$   4,150.00
supplies		$       275.00		$       275.00
prepaid insurance		$   2,475.00		$   2,475.00
office equipment		$   7,500.00		$   7,500.00
TOTAL (A)				$ 24,345.00
Accmulated dep-ofc equipment			$         50.00		$          50.00
accounts payable			$   8,350.00		$    8,350.00
wages payable			$       140.00		$        140.00
unearned revenue			$   3,600.00		$    3,600.00
common stock			$   9,000.00		$    9,000.00
TOTAL(B)			$ 21,140.00		$ 21,140.00
retained earning (A)-(B)					$    3,205.00
Dividends		$   1,750.00		0
INCOME SUMMARY
fees earned			21200
exoenses: wages exp		$   2,940.00		0	0
office rent exp		$   2,550.00		0
equipment rent exp		$   1,375.00		0
utilities exp		$   1,215.00		0
music exp		$   3,610.00		0
Advertisment exp		$   1,500.00		0
supplies exp		$       925.00		0
isurance exp		$       225.00		0
Depreciation exp		$         50.00		0
miscellaneous exp		$   1,855.00		0
total		$ 42,340.00	$ 42,340.00	$ 24,345.00	$ 24,345.00
INCOME STATEMENT AS ON JULY 31,2018
fees earned (1)			$ 21,200.00
exoenses: wages exp		$   2,940.00
office rent exp		$   2,550.00
equipment rent exp		$   1,375.00
utilities exp		$   1,215.00
music exp		$   3,610.00
Advertisment exp		$   1,500.00
supplies exp		$       925.00
isurance exp		$       225.00
Depreciation exp		$         50.00
miscellaneous exp		$   1,855.00
TOTAL OPERATING EXPENSES(2)			$ 16,245.00
NET INCOME (1)-(2)			$   4,955.00
STATEMENT OF RETAINED EARNING
Net income		$   4,955.00
less: Dividend		$   1,750.00
closing balance of retained earing		$   3,205.00
BALANCE SHEET AS ON JULY 31 ,2018
CURRENT ASSETS			Amount
cash			$   9,945.00
accounts receivable			$   4,150.00
supplies			$       275.00
prepaid insurance			$   2,475.00
total current assets			$ 16,845.00
FIXED ASSETS
office equipment		$   7,500.00
less: accumulated depreciation		$        -50.00	$   7,450.00
TOTAL ASSESTS			$ 24,295.00
LAIBILITIES & STOCKHOLDERS EQUITY
CURRENT LAIBILITIES
accounts payable			$   8,350.00
wages payable			$       140.00
unearned revenue			$   3,600.00
TOTAL CURRENT LAIBILITIES			$ 12,090.00
Common stock			$   9,000.00
retained earning			$   3,205.00
total stockholder equity			$ 12,205.00
total labilities & stockholder equity			$ 24,295.00
fees earned		$ 21,200.00
income summary			$ 21,200.00
(to record revenue closed )
income summary		$ 16,245.00
wages exp			$   2,940.00
office rent exp			$   2,550.00
equipment rent exp			$   1,375.00
utilities exp			$   1,215.00
music exp			$   3,610.00
advertisment exp			$   1,500.00
supplies exp			$       925.00
insurance exp			$       225.00
Depreciation exp			$         50.00
miscellaneause exp			$   1,855.00
( to record close to income summary)
income summary		$   4,955.00
retained earning			$   4,955.00
(income summary t/f to retained earning)
Retained earning		$   1,750.00
dividends			$   1,750.00
( dividend t/f to retained earing)
POST CLOSING TRAIL BALANCE AS ON DECEMBER 31, 2018
PARTICULARS		Dr	Cr
cash		$   9,945.00
accounts receviable		$   4,150.00
supplies		$       275.00
prepaid insurance		$   2,475.00
office equipment		$   7,500.00
accumulated dep office equioment			$         50.00
account payable			$   8,350.00
wages payable			$       140.00
unearned revenue			$   3,600.00
common stock			$   9,000.00
Retained earning			$   3,205.00
Total		$ 24,345.00	$ 24,345.00