Prepare the closing entries

Assignment Help Financial Accounting

Reference no: EM1312500

Recording adjusting entries and preparing financial statements.

Record adjusting entries and prepare financial Statements.

The accounting records for Beta Company contained the following balance as of December 31, 2008:

Assets	Liabilities and Shareholders' Equity
Cash	$50,000	Accounts Payable	$17,500
Accounts Receivable	26,500
Prepaid Rent	3,600	Common Stock	48,600
Land	10,500	Retained Earnings	24,500
Totals	$90,600		$90,600

The following accounting events apply to Beta's 2009 fiscal year:

a. Jan. 1 Beta purchased a computer that cost $18,000 for cash. Depreciation is $6,000 per year.

b. Mar. 1 The Company borrowed $20,000 by issuing a two-year note at 12%.

c. May 1 The Company paid $6,000 cash in advance for a six-month lease starting on July 1 for office space.

d. June 1 The Company paid dividends of $2,000 to the owners.

e. July 1 The Company purchased land that cost $15,000 cash.

f. Aug 1 Cash payments on accounts payable amounted to $5,500.

g. Aug 1 Beta received $13,200 cash in advance for 12 months of service to be performed monthly for the next year, beginning on receipt of payment.

h. Sept. 1 Beta sold a parcel of land for $13,000, the amount it originally paid for the land.

i. Oct. 1 Beta purchased $1,300 of supplies on account.

j. Nov. 1 Beta purchased short-term investments for $10,000. The investments earn 5% per year.

k. Dec. 31 The Company earned service revenue on account during the year that amounted to $50,000.

l. Dec. 31 Cash collections from accounts receivable amounted to $46,000.

m. Dec. 31 The Company incurred other operating expenses on account during the year that amounted to $5,850.

a. Salaries that had been earned by the sales staff but not yet paid amounted to $2,300.

b. Supplies on hand at the end of the period totaled $200.

c. The beginning balance of $3,600 in Prepaid Rent was completely used up by the end of the year.

The following additional information is available at December 31:

Based on the preceding transaction data, some additional adjustments need to be made before the financial statements can be prepared.

Required

a. Open T-accounts and record the account balance as of December 31, 2008.

b. Prepare the journal entries to record the transactions that occurred during 2009 and the necessary adjusting entries at year-end. (Land is not depreciated.)

c. Post the journal entries to the T-accounts. (Hint: some new accounts must be opened.)

d. Prepare all four financial statements for the year ended December 31, 2009.

e. Prepare the closing entries.

a. Open t-accounts and record the account balances at December 31, 2008.

b. Prepare the journal entries to record the transactions that occurred during 2009 (transactions a - m on page 214).

c. Post the journal entries to the general ledger (the t-accounts).

d. Prepare an unadjusted trial balance.

e. Prepare the journal entries to record the adjusting entries on December 31 and post them to the ledger. Make the references for the adjusting entries numerical, starting with 1 (transactions 1 - n). Prepare an adjusted trial balance.

Reference no: EM1312500

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