Chapter 4: Q15RQ (page 216)
How is the Income Summary account used? Is it a temporary or permanent account?
Income summary account records the revenues and expenses for the period, to estimated net income or loss. It is a permanent account.
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Winters Landscape Services accrued \(4,000 of Salaries Expense at December 31. Winters paid the next payroll at January 10 of
\)6,000. This payment included the accrued amount at December 31, plus $2,000 for the first few days of January.
24A. Record the reversing entry.
For each account listed, identify the category in which it would appear on a classified balance sheet.
4. Office Supplies
Identify two asset categories on the classified balance sheet, and give examples of each category.
The adjusted trial balance of Erickson Real Estate Appraisal at June 30, 2018, follows:
Requirements
1. Prepare the company’s income statement for the year ended June 30, 2018.
2. Prepare the company’s statement of retained earnings for the year ended June 30, 2018.
3. Prepare the company’s classified balance sheet in report form at June 30, 2018.
4. Journalize the closing entries.
5. Open the T-accounts using the balances from the adjusted trial balance, and post the closing entries to the T-accounts.
6. Prepare the company’s post-closing trial balance at June 30, 2018.
Lucas Architects recorded the following adjusting entries as of December 31: a. Service Revenue accrued, \(2,600. b. Unearned Revenue that has been earned, \)1,300. c. Office Supplies on hand, \(530. The balance of the Office Supplies account was \)880. d. Salaries owed to employees, \(600. e. One month of Prepaid Rent has expired, \)3,100. f. Depreciation on equipment, $1,075. Journalize any necessary reversing entries for Lucas Architects.
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