Refer to the adjusted trial balance of Wilderness Guide Service Inc., illustradeted in Excercise 5.3 (3E) to respond to the following items.

a. Prepare all necessary closing entries at December 31, 2007.

b. Prepare an after closing trial balance dated December 31, 3007.

c. Compare retained earnings balance reported in the after-closing trial balance prepared in part b to the balance reported in the adjusted trial balance.  Explain why the two balances are different.  (Include in your explanation why the balance reported in the after-closing trial balance has increased or decreased subsequent to the closing process.)


Wilderness Guide Service

Adjusted Trial Balance

December 31, 2007

Cash                                                                12,200

Accounts Receivable                                          31,000

Camping Supplies                                              7,900

Unexpired insurance Policies                               2,400

Equipment                                                         70,000

Accumlated Depreciation: equipment                                       60,000

Notes payable (due 4/1/09)                                                     18,000

Accounts Payable                                                                       9,500

Capital Stock                                                                          25,000

Retained earnings                                                                   15,000

Dividends                                                           1,000

Guide Revenue earned                                                             102,000

Salary Expenses                                                 87,500

Camping Supply expense                                      1,200

insurance Expense                                             9,600

Depreciation expense: equipment                        5,000

Interest Expense                                                1,700

                                                                         229,500        229,500