Home Repair is a new business which began operations on July 1. The company follows a policy of closing its accounts and preparing financial statements at the end of each month. A trial balance at September 30 appears below. LO8

Note that the trial balance includes two assets subject to depreciation: the building and the repair equipment. The accumulated depreciation accounts in the trial bal¬
ance show the total depreciation for July and August; depreciation has not yet been recorded for September.
Instructions a Prepare adjusting entries at September 30 to record depreciation. Use one entry to record depreciation on the building and a second entry to record depreciation on the repair equipment. The amounts of depreciation for September are $168 on the building and $125 on the repair equipment, b Prepare an adjusted trial balance at September 30. (This will differ from the trial balance only by inclusion of the depreciation recorded in part a.)
c Prepare an income statement for the month ended September 30 and a balance sheet in report form. In the owner’s equity section of the balance sheet, show the change in capital resulting from September operations, d Prepare journal entries to close the accounts. Use four entries: (1) to close the revenue account, (2) to close the expense accoufits, (3) to close the Income Sum¬
mary account, and (4) to close the owner’s drawing account.

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HOME REPAIR Trial Balance September 30, 19. Cash Accounts receivable Land Building Accumulated depreciation: building Repair equipment Accumulated depreciation: repair equipment Notes payable Accounts payable Paul Klein, capital Paul Klein, drawing Repair service revenue Advertising expense Repair parts expense Utilities expense Wages expense $ 2,500 1,500 29,400 50,400 $ 336 7,500 250 28,000 1,594 58,800 1,400 8,520 150 700 170 3,780 $97,500 $97,500