Accounting 26e Problems : Series B - PR 4-2B al 3 (0) 1 147 30,000 8,750 4,550 3
ID: 2333471 • Letter: A
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Accounting 26e Problems : Series B - PR 4-2B al 3 (0) 1 147 30,000 8,750 4,550 3,000 e) 4 PR 4-2B Financial statements and closing entries 1. Nicole Gorman, The apital, October 31: 13,000 The Gorman Group is a financial planning services firm owned and ope ratr-The Gorman Gorman. As of October 31, 2016, the OBJ. 2,3 Group prepared an end-of-period spreadsheet, part of end of the fiscal year, the accountant for The Gorman which follows: The Gorman Group For the Year Ended October 31, 2016 Trial Balance Account Title Cr. 28.150 6,350 9,500 5,000 1 17.200 240,000 151,700 33.300 3,300 1,500 220,000 Accounts Payable 19Uneaned Rent 21 3 Rent Revenue Nicole Gorman, Capital Nicole Gorman, Drawing Service Fees 468,000 5,000 291,000 17.500 15,500 9.000 Salaries Expense 26 Rent Expense Supplies Expense Depreciation Expense-Buildiegs 28 Ubties Expense 6 600 ,450 3,000 Continued)Explanation / Answer
1)
Income statement
Revenue
5,000
Rent Revenue
468,000
Service Fees
473,000
Expenditure
Salary Expense
291,000
Utilities Expense
8,500
Repairs Expense
3,450
Depreciation Expense—Equipment
17,500
Rent Expense
15,500
Supplies Expense
9,000
Insurance Expense
3,000
Miscellaneous Expense
5,450
Depreciation Expense—Building
6,600
360,000
Net income
113,000
Balance sheet
Cash
11,000
Accounts payable
33,000
Accounts receivable
28,150
Salaries payable
3,300
Supplies
6,350
Unearnd rent
1,500
Prepaid insurance
9,500
Total current assets
55,000
Total liabilities
37,800
Owner's equity statement
Nicole Gorman, capital
220,000
Net income
113,000
Minus: Withdrawls
20,000
Increase in owner’s capital
93,000
Nicole Gorman, capital
313,000
2)
Oct-31
Rent Revenue
5,000
Service Fees
468,000
Income Summary
473,000
Income Summary
353,400
Salary Expense
291,000
Utilities Expense
8,500
Repairs Expense
3,450
Depreciation Expense—Equipment
17,500
Rent Expense
15,500
Supplies Expense
9,000
Insurance Expense
3,000
Miscellaneous Expense
5,450
Curtis Graves, Capital
20,000
Nicole Gorman, Drawing
20,000
Income Summary
220,000
Nicole Gorman, Capital
220,000
3) The increase of $115,000 is caused due to $20,000 and a $95,000 net income.
Income statement
Revenue
5,000
Rent Revenue
468,000
Service Fees
473,000
Expenditure
Salary Expense
291,000
Utilities Expense
8,500
Repairs Expense
3,450
Depreciation Expense—Equipment
17,500
Rent Expense
15,500
Supplies Expense
9,000
Insurance Expense
3,000
Miscellaneous Expense
5,450
Depreciation Expense—Building
6,600
360,000
Net income
113,000
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