Prepare a post-closing trail balance

Reference no: EM131914936

Problem

During the month of October of the current year, Dan's Accounting Service was opened. The following transactions occurred.

Oct 1- Dan sold $70,000 worth of stock (50 shares) to start the business.

Oct 1- Dan purchased $9,500 worth of office equipment on account from Noe's Furniture Supply.

Oct 1- Dan paid October's rent on the office. He wrote a check for $2,500.

Oct 2- Dan purchased $400 worth of office supplies for cash.

Oct 4-The telephone was installed. We paid $95 (Utilities Expense).

Oct 4- Dan placed an advertisement in the Anoka County Shopper. It cost $150 (cash).

Oct 4- Dan started a petty cash fund with $50 for a fund balance.

Oct 5- We purchased (for cash) $45 worth of stamps (Miscellaneous Expense).

Oct 5- A three-month umbrella insurance policy was purchased for $720 (cash).

Oct 7- Pola's Automotive Supply Company paid us $2,800 (cash) for setting up their books.

Oct 9- We earned $3,200 from Esparsen's Fine Furniture Company for setting up their books. They will pay us later.

Oct 12- We paid a part-time employee $90 for running errands. There are no taxes to be withheld.

Oct 14- Frisque's Food Service, Inc. paid us $1,700 for helping them with their taxes. The actual bill was for $3,500. They will pay us the rest next month.

Oct 19- We paid our part-time employee $80 for running errands. There are no taxes to be withheld.

Oct 23- We sent a check for $1,000 to Noe's Furniture Supply for the office equipment purchased on October 1st.

Oct 26- We earned $800 for consulting with Strodthoff's Clothing Outlet. They will pay us later.

Oct 26- We paid our part-time employee $50 for running errands. There are no taxes withheld.

Oct 30- Esparsen's Fine Furniture Company paid us $900 on account for the work we did for them on October 9.

Oct 30- Dan paid the stockholders $600 in dividends.

Oct 31- Dan paid the electric bill which was $90.

Oct 31- Dan replenished the petty cash fund. He had used $12 for office supplies and $18 for miscellaneous expenses.

CHART OF ACCOUNTS TO USE.....
101. Cash
102 Petty Cash	108 Accounts Receivable
112 Office Supplies	118 Prepaid Insurance
201 Office Equipment	202 Accumulated Depreciation-Office Equipment
301 Accounts Payable	511 Contributed Capital
512 Retained Earnings	513 Dividends
611 Professional Fees	810 Advertising Expense
815 Depreciation Expense	820 Insurance Expense
825 Miscellaneous Expense	830 Office Supplies Expense
835 Rent Expense	840 Utilities Expense
845 Wages Expense	308 Wages Payable

QUESTIONS:

1. Prepare an Income Statement (don't forget the earnings per share), Statement of Retained Earnings, and a Classified Balance Sheet.

2. Journalize the closing entries

3. Post the closing entries

4. Prepare a post-closing trail balance.

Reference no: EM131914936

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