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