Adjusting and Closing Entries and Post Closing Trial Balance
Accounts of Pioneer Heating Corporation at the end of the first year of operations showed the following balances. In addition, prepaid operating expenses are $4,000, and accrued sales commissions payable are $5,900. Investment revenue receivable is $1,000. Depreciation for the year on buildings is $4,500 and on machinery, $5,000. Federal and state income taxes for the year are estimated at $18,100.
|
|
Debit |
Credit |
|
Cash |
$ 39,000 |
|
|
Inventory |
50,000 |
|
|
Investment |
50,000 |
|
|
Land |
70,000 |
|
|
Buildings |
180,000 |
|
|
Machinery |
100,000 |
|
|
Accounts Payable |
|
$ 65,000 |
|
Common Stock |
|
320,000 |
|
Additional Paid In Capital |
|
40,000 |
|
Sales |
|
590,000 |
|
Cost of Goods Sold |
230,000 |
|
|
Sales Commissions |
200,000 |
|
|
General Operating Expenses |
101,000 |
|
|
Investment Revenue |
|
5,000 |
|
Totals |
$1,020,000 |
$1,020,000 |
1. Prepare the necessary entries to adjust and close the books.
2. Prepare a post closing trial balance.