Refer to Exercise 3-23 of Chapter 3. Start from the posted T-accounts and the adjusted trial balance shown below that Kerr Consulting prepared at December 31, 2013. If you did not do Exercise 3-23 , you can complete this Exercise by using the accounts and balances given in the adjusted trial balance at December 31, 2013, shown below.

Required
1. Journalize, with explanations, and post to T-accounts the closing entries at December 31,
2013. Denote each closing amount as Clo. and account balance as Bal.
2. Prepare a classified balance sheet in report format at December 31, 2013.
3. Compute the current ratio and the debt ratio of Kerr Consulting and evaluate these ratio values as indicative of a strong or weak financial position.
4. If your instructor assigns it, complete the accounting work sheet at December 31, 2013.

Transcribed Image Text:

KERR CONSULTING Adjusted Trial Balance December 31, 2013 Cash $27,850 Accounts receivable 900 Supplies Equipment Accumulated amortization-equipment 100 2,000 33 Furniture 6,000 Accumulated amortization-furniture 100 Accounts payable Salaries payable 6,100 500 1,333 Unearned revenue Alex Kerr, capital 30,000 Alex Kerr, withdrawals 2,000 Service revenue 5,067 Rent expense Utilities expense Salaries expense 3,000 250 500 Amortization expense equipment Amortization expense-furniture Supplies expense 33 100 400 Total $43,133 $43,133