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Chapter 4 Practice - Solution

The document summarizes the financial statements for XYZ Company as of July 31, 2018. It includes an income statement showing revenues of $145,784 and net profit of $86,039. An owner's equity statement shows an opening balance of $35,482 and a closing balance of $131,521 after contributions, profits, and withdrawals. A classified balance sheet lists total assets of $152,997 including $125,845 in cash and total liabilities and owner's equity of $152,997 including $131,521 in owner's capital. Closing entries are also provided to close accounts to owner's capital.

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Ngân Giang
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53 views3 pages

Chapter 4 Practice - Solution

The document summarizes the financial statements for XYZ Company as of July 31, 2018. It includes an income statement showing revenues of $145,784 and net profit of $86,039. An owner's equity statement shows an opening balance of $35,482 and a closing balance of $131,521 after contributions, profits, and withdrawals. A classified balance sheet lists total assets of $152,997 including $125,845 in cash and total liabilities and owner's equity of $152,997 including $131,521 in owner's capital. Closing entries are also provided to close accounts to owner's capital.

Uploaded by

Ngân Giang
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 4 Practice – Answer Key

XYZ Company
Account Balances as of July 31, 2018
All accounts have “normal” account balances.

Account Account Name Current


Number Balance

1010 Cash 125,845


1020 Accounts Receivable 25,742
1040 Office Supplies 1,410
2010 Accounts Payable 5,723
2020 Note Payable 15,753
3010 Bill Smith, Owner Capital 47,482
3020 Bill Smith, Owner Withdrawals 2,000
4010 Ticket Sales 145,784
5010 Salary Expense 55,432
5040 Automobile Expense 3,863
5050 Insurance Expense 0
5090 Miscellaneous Expense 450

Part 1: Income Statement

Income Statement
XYZ Company
Month ended July 31,2018

Revenue
Ticket Sales 145,784
Total Revenue 145,784

Expenses
Salary Expense 55,432
Automobile Expense 3,863
Miscellaneous Expense 450
Total Expenses 59,745
Total Net Profit 86,039
Part 2: Statement of Owner’s Equity
Opening Balance at July 1, 2018 $35,482

Statement of Owner’s Equity


XYZ Company
As of July 31,2018

Opening Balance at July 1, 2018 35,482


Add: Owner Contribution during July 12,000
Net Profit for July 86,039
Increase in fund 133,521

Less: Owner’s Withdrawal during July (2,000)

Closing Balance at July 31, 2018 131,521

Part 3: Classified Balance Sheet

Classified Balance Sheet


XYZ Company
As of July 31,2018

Assets
Current Assets:
Cash 125,845
Accounts Receivable 25,742
Office Supplies 1,410
Total Current Assets / Total Assets 152,997

Liabilities & Owner’s Equity


Current Liabilities:
Accounts Payable 5,723
Note Payable 15,753
Total Current Liabilities / Total Liabilities 21,476

Bill Smith, Owner Capital 131,521


Total Liabilities & Owner’s Equity 152,997
Part 4: Closing Entries

July 31/18 Ticket Sales 145,784


Income Summary 145,784
To close out Revenue Accounts

July 31/18 Income Summary 59,745


Salary Expense 55,432
Automobile Expense 3,863
Miscellaneous Expense 450
To close out Expense Accounts

July 31/18 Income Summary 86,039


Bill Smith, Owner Capital 86,039
To close Net Profit into Owner Capital

July 31/18 Bill Smith, Owner Capital 2,000


Bill Smith, Owner Withdrawals 2,000
To close out owner withdrawals into Owner Capital

Income Summary 3300 Bill Smith, Owner Capital 3010

145,782 (1) 35,482 (open balance)


12,000 (contributed in July)
(2) 59,745

86,039 Balance 86,039 (closing entry 3)

(closing Entry 4) 2,000


(3) 86,039

0 0 131,521

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