6.

Prepare journal entries to record each of the following November transactions.

7.

Post the November entries.

8.

Prepare a trial balance at November 30, 2017.

9.

Prepare an income statement and a statement of changes in equity for the two

months ended November 30, 2017, as well as a balance sheet at November 30, 2017.

SECTION 2:

After the success of its first two months, Mary Graham has decided to continue operating

Echo Systems. (The transactions that occurred in these months are described in Chapter

2.) Before proceeding in December, Graham adds these new accounts to the chart of

accounts for the ledger:

Required :

1.

Prepare journal entries to record each of the following transactions for Echo

Systems. Post the entries to the accounts in the ledger.

2.

Prepare adjusting entries to record the following additional information collected on

December 31, 2017. Post the entries to the accounts in the ledger.

a.

The December 31 inventory of computer supplies was $1,440.

b.

Three months have passed since the annual insurance premium was paid.

c.

As of the end of the year, Carly Smith has not been paid for four days of

work at the rate of $200 per day.

d.

The computer is expected to have a four-year life with no residual value.

e.

The office equipment is expected to have a three-year life with no

residual value.

f.

Prepaid rent for three of the four months has expired.

3.

Prepare an adjusted trial balance as of December 31, 2017.

4.

Prepare an income statement and statement of changes in equity for the three months

ended December 31, 2017.

5.

Prepare a balance sheet as of December 31, 2017.

SECTION 3:

The transactions of Echo Systems for October through December 2017 have been

recorded in sections 1 and 2, as well as the year-end adjusting entries. Prior to closing the

temporary accounts for 2017, the accounting system is modified to include the Income

Summary account, which is given the number 901.

Required :

1.

Record and post the appropriate closing entries.

2.

Prepare a post-closing trial balance.