Question

The following is Baker Co.'s Pre-Closing Trial Balance as of December 31, 2017. Baker's accounting period is a month, thus the balances in the temporary accounts are for the month of December 2017.

Account	Debit	Credit
Cash	10,000
Accounts Receivable	25,000
Inventory	40,000
Supplies	5,000
Equipment	100,000
Accumulated Depreciation		30,000
Accounts Payable		12,000
Note Payable		13,000
Interest Payable		3,000
Unearned Revenue		8,000
Dividends Payable		7,000
Common Stock		10,000
Retained Earnings		46,000
Sales Revenue		193,000
Cost of Goods Sold	78,000
Depreciation Expense	18,000
Wages Expense	42,000
Supplies Expense	3,000
Interest Expense	1,000
Total	322,000	322,000

Use the information in Baker’s Trial balance to answer questions D through H.

D. In the General Journal below record the journal entry that should be made to close the Revenue account(s).

E. In the General Journal below record the journal entry that should be made to close the Expense accounts.

F. Based on Baker’s account balances, the amount of Net Income that would be shown on Baker’s Income Statement for December 2017 would be:

G. Based on Baker’s account balances, the amount of Total Assets that would be shown on Baker’s Balance Sheet as of December 31, 2017 would be:

H. Based on Baker’s account balances, the amount of Total Equity that would be shown on Baker’s Balance Sheet as of December 31, 2017 would be:

Answer 1

D. In the General Journal below record the journal entry that should be made to close the Revenue account(s).

Account name	Debit	Credit
Sales revenue	193000
Retained Earnings		193000

E. In the General Journal below record the journal entry that should be made to close the Expense accounts.

Account name	Debit	Credit
Retained Earnings	142000
Cost of Goods Sold		78000
Depreciation Expense		18000
Wage Expense		42000
Supplies Expense		3000
Interest Expense		1000

F. Based on Baker’s account balances, the amount of Net Income that would be shown on Baker’s Income Statement for December 2017 would be:

ANSWER = 193,000 - 142,000 = 51,000

G. Based on Baker’s account balances, the amount of Total Assets that would be shown on Baker’s Balance Sheet as of December 31, 2017 would be:

Cash	10000
Accounts Receivable	25000
Inventory	40000
Supplies	5000
Equipment 100000
Accumulated Depreciation (30000)	70000
Total Assets	150000

H. Based on Baker’s account balances, the amount of Total Equity that would be shown on Baker’s Balance Sheet as of December 31, 2017 would be:

10,000 + (46,000 + 51,000) = 107,000