Start by inserting the beginning balances in the T-accounts from the Year 0 Balance Sheet and then
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Start by inserting the beginning balances in the T-accounts from the Year 0 Balance Sheet and then post your journal entries from the General Journal. Next, calculate the ending balance in each account. Then, prepare Year 1 financial statements based on the ending balances in each T-account. Finally, go back to the General Journal and prepare closing entries. Post your closing entries to the General Ledger T-accounts. Finally, prepare a Post-Closing Trial Balance.
Adomain Income Statement | ||
for Year ended December 31, Year 0 | ||
Revenues | ||
Sales Revenue | $146,500 | |
Expenses | ||
Cost of Goods Sold | (62,500) | |
R & D Expense | (9,100) | |
Sales Commissions | (3,000) | |
Marketing Expense | (9,000) | |
Rent Expense | (5,700) | |
Other Operating Expenses | (23,000) | |
Income from Operations | $34,200 | |
Interest Income | 400 | |
Income before Taxes | 34,600 | |
Income Tax Expense | (8,500) | |
Net Income | 26,100 |
Adomain Balance Sheet | ||||
As of December 31, Year 0 | ||||
Assets | ||||
Cash | $80,000 | |||
Marketable Securities | 6,700 | |||
Accounts Receivable | 20,000 | |||
Inventory | 25,000 | |||
PP&E (net) | 34,700 | |||
Intangible Assets | 10,500 | |||
Other Long-Term Assets | 15,000 | |||
Total Assets | $191,900 | |||
Liabilities & Equity | ||||
Accounts Payable | $45,000 | |||
Notes Payable* | 28,500 | |||
Unearned Revenue | 50,000 | |||
Income Tax Payable | 4,300 | |||
Common Stock | 45,000 | |||
Retained Earnings | 19,100 | |||
Total Liabilities & Equity | $191,900 | |||
*Assume these notes represent non-interest-bearing loans from owners, due in 5 years . |
Related Book For
College Accounting A Practical Approach
ISBN: 978-0132564441
11th Canadian Edition
Authors: Jeffrey Slater, Brian Zwicker
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