Financial Statement Preparation and Closing Process Summary account balances for Mom’s Cookie Company at the end of February are presented below. The summary includes all transactions for February, not just those described in this chapter. In particular, additional sales transactions have been included.
|
Mom’s Cookie Company |
|
|
Account |
Balance |
|
Assets: |
|
|
Cash |
7,740 |
|
Accounts Receivable |
1,580 |
|
Merchandise Inventories |
7,520 |
|
Supplies |
60 |
|
Prepaid Rent |
1,200 |
|
Equipment |
31,000 |
|
Accumulated Depreciation |
1,040 |
|
Total Assets |
48,060 |
|
Liabilities: |
|
|
Accounts Payable |
1,400 |
|
Unearned Revenue |
3,000 |
|
Interest Payable |
400 |
|
Notes Payable |
30,000 |
|
Total Liabilities |
34,800 |
|
Owners’ Equity: |
|
|
Contribution by Owners |
10,000 |
|
Retained Earnings |
480 |
|
Sales Revenue |
17,160 |
|
Cost of Goods Sold |
11,440) |
|
Wages Expense |
1,000 |
|
Rent Expense |
600 |
|
Depreciation Expense |
520 |
|
Supplies Expense |
400 |
|
Utilities Expense |
220 |
|
Interest Expense |
200 |
|
Total Owners’ Equity |
13,260 |
Required:
Use the account balances to (a) prepare an income statement for February,
(b) close the revenue and expense accounts (show journal transactions and ledger accounts),
(c) prepare a post closing summary of account balances, and (d) prepare a balance sheet.