Question

Refer to the Practice Set data provided in Chapters 2 and 3 for Crystal Clear Cleaning.

Requirements

1. Prepare a worksheet (optional) at November 30, 2018. Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.

2. Prepare an income statement and statement of retained earnings for the month ended November 30, 2018. Also prepare a classified balance sheet at November 30, 2018, using the report format. Assume the Notes Payable is long-term. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.

3. Prepare closing entries at November 30, 2018, and post to the accounts. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance in each account. Denote each closing amount as Clos. and each account balance as Balance.

4. Prepare a post-closing trial balance at November 30, 2018.

Short answer

Post-Closing Trial Balance: $72,900

Step-by-step solution

Worksheet

Crystal Clear Company
Worksheet
November 30, 2018
Account Names	Unadjusted Trial Balance	Adjustments	Adjusted Trial Balance
Debit	Credit	Debit	Credit	Debit	Credit
Cash	$ 51,650				$ 51,650
Accounts Receivables	4,000				4,000
Cleaning Supplies	320			$ 270	50
Prepaid Rent	4,000				4,000
Prepaid Insurance	4,800				4,800
Equipment	5,400				5,400
Truck	3,000				3,000
Accounts Payable		$ 1,245				$ 1,245
Unearned Revenue		15,000				15,000
Notes Payable		36,000				36,000
Common Stock		18,000				18,000
Dividends	1,400				1,400
Service Revenue		5,100				5,100
Salaries Expense	400				400
Advertising Expense	200				200
Utilities Expense	175				175
Supplies Expense			$ 270		270
Depreciation Expense			150		150
Accumulated Depreciation				150		150
Interest Expense			59		59
Accrued Interest				59		59
Total	$ 75,345	$ 75,345	$ 479	$ 479	$ 75,554	$ 75,554

Income statement, statement of retained earnings and balance sheet

Income Statement
Canyon Canoe Company
		Amount
Particular
Service Revenue		5,100
Salaries Expense	400
Advertising Expense	200
Utilities Expense	175
Supplies Expense	270
Depreciation Expense	150
Interest Expense	59
Total Expenses		1,254
Net Income		$ 3,846

Retained Earnings Statement
Particular	Amount
Beginning Balance	0
Add: Net Income	$ 3,846
Less: Dividends	1,400
Ending Balance	$ 2,446

Balance Sheet
December 31, 2018
Assets		Amount
Current Assets
Cash		$ 51,650
Accounts Receivables		4,000
Cleaning Supplies		50
Prepaid Rent		4,000
Prepaid Insurance		4,800
Total Current Assets		$ 64,500
Non-current Assets
Equipment	5,400
Truck	3,000
Less: Accumulated Depreciation	150	8,250
Total Non-Current Assets		$ 8,250
Total Assets		$ 72,750
Liabilities and Shareholder’s equity
Current Liability
Accounts Payable		1,245
Unearned Revenue		15,000
Accrued Interest		59
Total Current Liability		$ 16,304
Non-Current Liability
Notes Payable		36,000
Total Non-Current Liability		36,000
Total Liability		52,304
Shareholders’ Equity
Wilson, Capital		$ 18,000
Add: Retained Earnings		2,446
Total Shareholders’ Equity		$ 20,446
Total Liabilities and Shareholders’ Equity		$ 72,750

Adjusting entries and posting into ledger

Date	Particular	Debit	Credit
2018
Dec 31	Total Revenue	$ 5,100
	Income Summary		$ 5,100
	Being revenue account closed
Dec 31	Income Summary	1,254
	Salaries Expense		400
	Advertising Expense		200
	Utilities Expense		175
	Supplies Expense		270
	Depreciation Expense		150
	Interest Expense		59
	Being all expenses closed to the income summary
Dec 31	Income Summary	3,846
	Retained Earnings		3,846
	Being net income closed to retained earnings

Income Summary
Clos. 2	$ 1,254	$ 5,100	Clos. 1
Clos. 3	3,846	3,846	Clos.
		0

Retained Earnings
		0	Adj. Bal.
Clos. 4	1,400	$ 3,846	Clos. 3
		2,446	Bal.

Post closing trial balance

Crystal Clear Cleaning
Post Closing Trial Balance
November 30, 2018
		Balance
Account Title	Debit	Credit
Cash	$ 51,650
Accounts Receivables	4,000
Cleaning Supplies	50
Prepaid Rent	4,000
Prepaid Insurance	4,800
Equipment	5,400
Truck	3,000
Accumulated Depreciation		$ 150
Accounts Payable		1,245
Unearned Revenue		15,000
Notes Payable		36,000
Common Stock		18,000
Accrued Interest		59
Retained Earnings		2,446
Total	$ 72,900	$ 72,900