Random Access, Inc. is a small business that leases computer equipment. Following are several account balances that were included in the company’s year-end adjusted trial balance:
Cash...................................................... $200,000
Interest Revenue................................... 5,000
Accounts Payable.................................. 60,000
Accumulated
Depreciation—Equipment.......................... 46,000
Rental Revenue....................................... 252,000
Dividends................................................ 11,000
Salaries Expense...................................... 95,000
Depreciation Expense.............................. 8,000
Required:
(a) Indicate which of the listed accounts are permanent accounts and which are temporary accounts.
(b) Given the information provided, prepare all appropriate closing entries for Random Access.
(c) Assume that all the necessary accounts to compute net income are included in the list provided. What is net income for Random Access for the year?
(d) If the Retained Earnings account contained a balance of $47,000 prior to closing, what is the balance of this account after closing entries are prepared and posted?