Question-bert farm store, On December 31, 2007, Bert's Farm

Question-bert farm store

Reference no: EM13257236

On December 31, 2007, Bert's Farm Store had the following account balances in its accounting system. All year-end adjustments had been entered, but the books had not yet been closed.

Bert's Farm Store

Account Balances before Closing

December 31, 2007

Account Balance Account Balance

Cash $700 Sales Revenue $2,200

Merchandise 2,800 Costof Goods Sold 900

Supplies 925 Wages Expense 400

Prepaid Insurance 450 Utilities Expense 150

Equipment 3,550 Depreciation Expense 50

Accumulated Depreciation 1,750 Insurance Expense 100

Interest Payable 150 Supplies Expense 150

Notes Payable 2,000 Interest Expense 100

Owners'Equity 4,175

A. What is the purpose of closing the books?

B. Prepare all necessary closing entries.

C. After closing, what is the amount of owners' equity that will be reported on the balance sheet?

Reference no: EM13257236

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