Reference no: EM13914748
At the beginning of 2013, Ron's Consulting had the following normal balances in its accounts:
Account Balance:
Cash ............... $26,000
Accounts Receivable ........ 19,000
Accounts Payable .......... 7,200
Common Stock ........... 19,800
Retained Earnings .......... 18,000
The following events apply to Ron's Consulting for 2013:
1. Provided $236,000 of services on account.
2. Incurred $23,960 of operating expenses on account.
3. Collected $248,000 of accounts receivable.
4. Paid $142,000 cash for salaries expense.
5. Paid $27,200 cash as a partial payment on accounts payable.
6. Paid an $22,000 cash dividend to the stockholders.
Required:
a. Record these transactions in a general journal.
b. Open T-accounts, and post the beginning balances and the preceding transactions to the appropriate accounts.
c. Record the beginning balances and the transactions in a horizontal statements model such as the following one:
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d. Record the closing entries in the general journal and post them to the T-accounts. What is the amount of net income for the year?
e. What is the amount of change in retained earnings for the year? Is the change in retained earnings different from the amount of net income? If so, why?
f. Prepare a post closing trial balance.
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