Continuing Problem Chapter 4 - Instruction #1

The adjusted trial balance of PS Music as of July 31, 20Y5 is shown below:

Account	Account No.	Debit Balances	Credit Balances
Cash	11	9,945
Accounts Receivable	12	4,150
Supplies	14	275
Prepaid Insurance	15	2,475
Office Equipment	17	7,500
Accumulated Depreciation-Office Equipment	18		50
Accounts Payable	21		8,350
Wages Payable	22		140
Unearned Revenue	23		3,600
Common Stock	31		9,000
Dividends	33	1,750
Fees Earned	41		21,200
Music Expense	54	3,610
Wages Expense	50	2,940
Office Rent Expense	51	2,550
Advertising Expense	55	1,500
Equipment Rent Expense	52	1,375
Utilities Expense	53	1,215
Supplies Expense	56	925
Insurance Expense	57	225
Depreciation Expense	58	50
Miscellaneous Expense	59	1,855
Total		42,340	42,340

a. Prepare an income statement for the two months ended July 31, 20Y5.

PS Music Income Statement For the Two Months Ended July 31, 20Y5

Line Item Description	Amount	Amount
Advertising ExpenseEquipment Rent ExpenseFees EarnedMiscellaneous ExpenseMusic ExpenseFees Earned		$fill in the blank 2
Expenses:
Fees EarnedMusic ExpensePrepaid InsuranceSuppliesWages PayableMusic Expense	$fill in the blank 4
Accounts ReceivableFees EarnedNet IncomePeyton Smith, CapitalWages ExpenseWages Expense	fill in the blank 6
CashFees EarnedOffice Rent ExpensePeyton Smith, DrawingSuppliesOffice Rent Expense	fill in the blank 8
Accounts ReceivableAdvertising ExpenseCashFees EarnedUnearned RevenueAdvertising Expense	fill in the blank 10
Accounts PayableCashEquipment Rent ExpenseFees EarnedSuppliesEquipment Rent Expense	fill in the blank 12
Accounts ReceivableCashFees EarnedPeyton Smith, CapitalUtilities ExpenseUtilities Expense	fill in the blank 14
Accounts PayableAccounts ReceivableFees EarnedSuppliesSupplies ExpenseSupplies Expense	fill in the blank 16
Fees EarnedInsurance ExpensePrepaid InsuranceSuppliesWages PayableInsurance Expense	fill in the blank 18
Accumulated Depreciation-Office EquipmentDepreciation ExpenseFees EarnedOffice EquipmentWages PayableDepreciation Expense	fill in the blank 20
Accounts PayableAccounts ReceivableCashMiscellaneous ExpensePrepaid InsuranceMiscellaneous Expense	fill in the blank 22
Total Expenses		fill in the blank 23
Net IncomeNet LossNet Income		$fill in the blank 25

b. Prepare a statement of stockholders equity for the two months ended July 31, 20Y5. (Note: Peyton Smith made investments in PS Music on June 1 and July 1, 20Y5.) If an amount is zero, enter in a "0". If a net loss is incurred or there is a decrease in owners equity, enter that amount as a negative number using a minus sign.

PS MUSIC Statement of Stockholders Equity For the Two Months Ended July 31, 20Y5

Line Item Description	Common Stock	Retained Earnings	Total
Balances, June 1, 20Y5Balances, July 31, 20Y5CashDividendsNet incomeBalances, June 1, 20Y5	$fill in the blank 27	$fill in the blank 28	$fill in the blank 29
Balances, June 1, 20Y5Balances, July 31, 20Y5CashIssued common stockNet lossIssued common stock	fill in the blank 31	fill in the blank 32	fill in the blank 33
Balances, June 1, 20Y5Balances, July 31, 20Y5CashNet incomeNet lossNet income	fill in the blank 35	fill in the blank 36	fill in the blank 37
Balances, June 1, 20Y5Balances, July 31, 20Y5CashDividendsNet lossDividends	fill in the blank 39	fill in the blank 40	fill in the blank 41
Balances, June 1, 20Y5Balances, July 31, 20Y5CashDividendsNet lossBalances, July 31, 20Y5	$fill in the blank 43	$fill in the blank 44	$fill in the blank 45

Journalize the closing entries. Include Posting References, using the account numbers in your spreadsheet. The retained earnings account is #32 in the ledger of PS Music. Refer to your answers from Chapter 4, Part 1 to complete this part.

If an amount box does not require an entry, leave it blank.

DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT
20Y5	Closing Entries
July 1July 5July 14July 24July 31July 1	Advertising ExpenseDepreciation ExpenseEquipment Rent ExpenseFees EarnedMusic ExpenseFees Earned	fill in the blank 3	fill in the blank 4	fill in the blank 5
	CashFees EarnedLandWages ExpenseWages PayableWages Expense	fill in the blank 7	fill in the blank 8	fill in the blank 9
	Accounts ReceivableCashDividendsOffice EquipmentOffice Rent ExpenseOffice Rent Expense	fill in the blank 11	fill in the blank 12	fill in the blank 13
	Accounts ReceivableCashEquipment Rent ExpenseOffice EquipmentRetained EarningsEquipment Rent Expense	fill in the blank 15	fill in the blank 16	fill in the blank 17
	Accounts PayableDividendsFees EarnedUnearned RevenueUtilities ExpenseUtilities Expense	fill in the blank 19	fill in the blank 20	fill in the blank 21
	Accounts PayableMusic ExpenseOffice EquipmentPrepaid InsuranceRetained EarningsMusic Expense	fill in the blank 23	fill in the blank 24	fill in the blank 25
	Accounts ReceivableAdvertising ExpenseCashDividendsSuppliesAdvertising Expense	fill in the blank 27	fill in the blank 28	fill in the blank 29
	Fees EarnedLandRetained EarningsSuppliesSupplies ExpenseSupplies Expense	fill in the blank 31	fill in the blank 32	fill in the blank 33
	CashDividendsInsurance ExpenseOffice RentPrepaid InsuranceInsurance Expense	fill in the blank 35	fill in the blank 36	fill in the blank 37
	Accumulated DepreciationDepreciation ExpenseOffice EquipmentRetained EarningsUnearned RevenueDepreciation Expense	fill in the blank 39	fill in the blank 40	fill in the blank 41
	Accounts ReceivableCashFees EarnedMiscellaneous ExpenseWages PayableMiscellaneous Expense	fill in the blank 43	fill in the blank 44	fill in the blank 45
	Accounts PayableDividendsFees EarnedRetained EarningsUnearned RevenueUnearned Revenue	fill in the blank 47	fill in the blank 48	fill in the blank 49

DATE	ACCOUNT	POST. REF.	DEBIT	CREDIT
July 1July 5July 14July 24July 31July 1	Depreciation ExpenseDividendsEquipment Rent ExpenseInsurance ExpenseRetained EarningsRetained Earnings	fill in the blank 52	fill in the blank 53	fill in the blank 54
	Depreciation ExpenseDividendsEquipment Rent ExpenseInsurance ExpenseRetained EarningsInsurance Expense	fill in the blank 56	fill in the blank 57	fill in the blank 58

PS Music Post-Closing Trial Balance July 31, 20Y5

Account	Debit Balances	Credit Balances
Accounts PayableCashCommon StockFees EarnedUnearned RevenueAccounts Payable	fill in the blank 2	fill in the blank 3
Accounts PayableAccounts ReceivableCommon StockFees EarnedUnearned RevenueAccounts Receivable	fill in the blank 5	fill in the blank 6
Accounts PayableCommon StockFees EarnedSuppliesUnearned RevenueFees Earned	fill in the blank 8	fill in the blank 9
Accounts PayableCommon StockFees EarnedPrepaid InsuranceUnearned RevenueFees Earned	fill in the blank 11	fill in the blank 12
Accounts PayableCommon StockFees EarnedOffice EquipmentUnearned RevenueUnearned Revenue	fill in the blank 14	fill in the blank 15
Accounts PayableAccumulated Depreciation-Office EquipmentCommon StockFees EarnedUnearned RevenueFees Earned	fill in the blank 17	fill in the blank 18
Accounts PayableAccounts ReceivableCashSupplies ExpenseWages ExpenseWages Expense	fill in the blank 20	fill in the blank 21
Accounts ReceivableCashSupplies ExpenseWages ExpenseWages PayableWages Expense	fill in the blank 23	fill in the blank 24
Accounts ReceivableCashMusic ExpenseUnearned RevenueWages ExpenseMusic Expense	fill in the blank 26	fill in the blank 27
Accounts ReceivableCashCommon StockMusic ExpenseWages ExpenseCommon Stock	fill in the blank 29	fill in the blank 30
Accounts PayableCashCommon StockRetained EarningsWages ExpenseCommon Stock	fill in the blank 32	fill in the blank 33
Total	fill in the blank 34	fill in the blank 35