Question

The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as of December 31.

No.	Account Title	Debit			Credit
101	Cash	$	18,000
126	Supplies		10,200
128	Prepaid insurance		2,000
167	Equipment		23,000
168	Accumulated depreciation—Equipment				$	6,500
301	A. Cruz, Capital					42,739
302	A. Cruz, Withdrawals		6,000
404	Services revenue					43,500
612	Depreciation expense—Equipment		2,000
622	Salaries expense		25,361
637	Insurance expense		1,827
640	Rent expense		2,915
652	Supplies expense		1,436
	Totals	$	92,739		$	92,739

1. Prepare the December 31, closing entries for Cruz Company. Assume the account number for Income Summary is 901.
2. Prepare the December 31, post-closing trial balance for Cruz Company. Note: A. Cruz, Capital was $42,739 on December 31 of the prior year.

Answer 1

Req 1		Accounts Title and Explanation	Debit	Credit
	Dec-31	Service Revenue	43,500
		Rent Revenue
		Income Summary		43,500
		(To record closing of credit balance account)
	Dec-31	Income Summary	39,539
		Depreciation Expense		2,000
		Salaries Expense		25,361
		Insurance		1,827
		Rent Expese		2,915
		Supplies Expense		1,436
		A. Cruz, Withdrawals		6,000
		(To record closing of debit balance account)
	Dec-31	Income Summary	3,961
		A. Cruz, Capital		3,961
		(To close income summary account)
Req 2		Post Closing Trial balance
		Account Title	Debit	Credit
		Cash	18,000
		Supplies	10,200
		Prepaid Insurance	2,000
		Equipmeht	23,000
		Acc. Dep-Equipment		6,500
		A. Cruz, Capital		46,700
		Total	53,200	53,200