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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

PROBLEM 6-7A

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CLOSING ENTRIES AND POST-CLOSING TRIAL BALANCE Refer to the work sheet in Problem 6-7A for Megaffin’s Repairs. The trial balance amounts (before adjustments) have been entered in the ledger accounts provided in the working papers. If you are not using the working papers that accompany this book, set up ledger accounts and enter these balances as of January 31, 20--. A chart of accounts is provided below.

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REQUIRED

  1. 1. Journalize (page 10) and post the adjusting entries.
  2. 2. Journalize (page 11) and post the closing entries.
  3. 3. Prepare a post-closing trial balance.

1.

To determine

Prepare adjusting entries post the adjusting entries in general ledger.

Explanation

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.

Prepare adjusting entries at January 31:

DateAccount Title and ExplanationPost. RefDebit ($)Credit ($)
January 31Supplies expense (SE–)523300
  Supplies (A–)141300
(To record cost of supplies used)
January 31Insurance Expense (SE–)535230 
    Prepaid Insurance (A–)145 230
(To record expired insurance...

1 and 2.

To determine

Prepare closing entries post the closing entries in general ledger.

3.

To determine

Prepare a post-closing trial balance.

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