The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 20Y3, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:

Instructions

1. Prepare an income statement, a statement of owner’s equity (no additional investments were made during the year), and a balance sheet.

2. Journalize the entries that were required to close the accounts at October 31.

3. If the balance of Nicole Gorman, Capital had instead increased $115,000 after the closing entries were posted and the withdrawals remained the same, what would have been the amount of net income or net loss?

Transcribed Image Text:

A G The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 20Y3 1 4 Adjusted 5 Trial Balance 6 Account Title Dr. Cr. 7 11,000 28,150 6,350 9,500 75,000 250,000 8 Cash 9 Accounts Receivable 10 Supplies 11 Prepaid Insurance 12 Land 13 Buildings 14 Accumulated Depreciation-Buildings 15 Equipment 16 Accumulated Depreciation-Equipment 17 Accounts Payable 18 Salaries Payable 19 Unearned Rent 20 Nicole Gorman, Capital 21 Nicole Gorman, Drawing 22 Service Fees 23 Rent Revenue 24 Salaries Expense 25 Depreciation Expense-Equipment 26 Rent Expense 27 Supplies Expense 28 Utilities Expense 29 Depreciation Expense-Buildings 30 Repairs Expense 31 Insurance Expense 32 Miscellaneous Expense 33 117,200 240,000 151,700 33,300 3,300 1,500 220,000 20,000 468,000 5,000 291,000 17,500 15,500 9,000 8,500 6,600 3,450 3,000 5,450 1,000,000 1.000,000 23