The following is the adjusted trial balance for Miller Company. Miller Company ADJUSTED TRIAL BALANCE December 31, 20-- ACCOUNT TITLE DEBIT CREDIT 1 Cash 8,130.00 2 Accounts Receivable 3,300.00 3 Prepaid Expenses 2,750.00 4 Equipment 10,400.00 5 Accumulated Depreciation 2,200.00 6 Accounts Payable 2,700.00 7 Notes Payable 1,000.00 8 Common Stock 9,200.00 9 Retained Earnings 2,000.00 10 Dividends 4,870.00 11 Fees Earned 36,600.00 12 Wages Expense 12,450.00 13 Rent Expense 4,900.00 14 Utilities Expense 3,475.00 15 Depreciation Expense 2,150.00 16 Miscellaneous Expense 1,275.00 17 Totals 53,700.00 53,700.00 Required: Prepare closing entries and the post-closing trial balance. Refer to the Chart of Accounts for exact wording of account titles. Chart of Accounts CHART OF ACCOUNTS Miller Company General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Prepaid Expenses 16 Equipment 17 Accumulated Depreciation LIABILITIES 21 Accounts Payable 22 Notes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary REVENUE 41 Fees Earned EXPENSES 51 Wages Expense 52 Rent Expense 53 Utilities Expense 54 Depreciation Expense 55 Miscellaneous Expense General Journal Prepare closing entries on December 31. Refer to the Chart of Accounts for the exact wording of account titles. PAGE 1 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 Post-Closing Trial Balance Statement Prepare the post-closing trial balance. Miller Company POST-CLOSING TRIAL BALANCE December 31, 20-- ACCOUNT TITLE DEBIT CREDIT 1 Cash 2 Accounts Receivable 3 Prepaid Expenses 4 Equipment 5 Accumulated Depreciation 6 Accounts Payable 7 Notes Payable 8 Common Stock 9 Retained Earnings 10 Totals
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1
|
Cash
|
8,130.00
|
|
2
|
|
3,300.00
|
|
3
|
Prepaid Expenses
|
2,750.00
|
|
4
|
Equipment
|
10,400.00
|
|
5
|
|
|
2,200.00
|
6
|
Accounts Payable
|
|
2,700.00
|
7
|
Notes Payable
|
|
1,000.00
|
8
|
Common Stock
|
|
9,200.00
|
9
|
|
|
2,000.00
|
10
|
Dividends
|
4,870.00
|
|
11
|
Fees Earned
|
|
36,600.00
|
12
|
Wages Expense
|
12,450.00
|
|
13
|
Rent Expense
|
4,900.00
|
|
14
|
Utilities Expense
|
3,475.00
|
|
15
|
Depreciation Expense
|
2,150.00
|
|
16
|
Miscellaneous Expense
|
1,275.00
|
|
17
|
Totals
|
53,700.00
|
53,700.00
|
Required: | |
Prepare closing entries and the post-closing trial balance. Refer to the Chart of Accounts for exact wording of account titles. |
CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||
Miller Company | |||||||||||||||||||||||||||||||||||||||||||||
General Ledger | |||||||||||||||||||||||||||||||||||||||||||||
|
|
DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
---|---|---|---|---|---|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
3
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
7
|
|
|
|
|
|
8
|
|
|
|
|
|
9
|
|
|
|
|
|
10
|
|
|
|
|
|
11
|
|
|
|
|
|
12
|
|
|
|
|
|
ACCOUNT TITLE | DEBIT | CREDIT | |
---|---|---|---|
1
|
Cash
|
|
|
2
|
Accounts Receivable
|
|
|
3
|
Prepaid Expenses
|
|
|
4
|
Equipment
|
|
|
5
|
Accumulated Depreciation
|
|
|
6
|
Accounts Payable
|
|
|
7
|
Notes Payable
|
|
|
8
|
Common Stock
|
|
|
9
|
Retained Earnings
|
|
|
10
|
Totals
|
|
|
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images