Assume for each of the following independent cases that the annual accounting period ends on December 31,

Question:

Assume for each of the following independent cases that the annual accounting period ends on December 31, 2017, and that the total of all revenue accounts was $150,000 and the total of all expense accounts was $130,000.

Case A: Assume that the company is a sole proprietorship owned by Proprietor A. Prior to the closing entries, the Capital account reflected a credit balance of $50,000 and the Drawings account showed a balance of $8,000.

Case B: Assume that the company is a partnership owned by Partner A and Partner B. Prior to the closing entries, the owners’ equity accounts reflected the following balances: A, Capital, $40,000; B, Capital, $38,000; A, Drawings, $5,000; and B, Drawings, $9,000. Profits and losses are divided equally.

Case C: Assume that the company is a corporation. Prior to the closing entries, the shareholders’ equity accounts showed the following:

Capital shares: par $10; authorized 30,00 shares; outstanding 15,000 shares
Contributed surplus: $5,000
Retained earnings: $65,000

Required:

1. Give all the closing entries required at December 31, 2017, for each of the separate cases.

2. Show how the equity section of the balance sheet would appear at December 31, 2017, for each case. Show computations.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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