Hydrangea Nurseries had the following general ledger balances at December 31, 2004:
|
Assets: |
|
|
Cash |
10,000 |
|
Accounts Receivable |
25,000 |
|
Inventory |
50,000 |
|
Prepaid Insurance |
5,000 |
|
Equipment |
300,000 |
|
Accumulated Depreciation |
80,000 |
|
Total Assets |
310,000 |
|
Liabilities: |
|
|
Accounts Payable |
35,000 |
|
Notes Payable |
130,000 |
|
Total Liabilities |
165,000 |
|
Owners’ Equity: |
|
|
Contributed Capital |
90,000 |
|
Retained Earnings |
45,000 |
|
Sales Revenue |
300,000 |
|
Cost of Goods Sold |
140,000 |
|
Insurance Expense |
5,000 |
|
Wages Expense |
75,000 |
|
Utilities Expense |
40,000 |
|
Interest Expense |
10,000 |
|
Depreciation Expense |
20,000 |
|
Total Owners’ Equity |
145,000 |
a. Prepare the entry to close the revenue and expense accounts at the end of the year.
b. Prepare a post closing summary similar to Exhibit 13.