Chandler Company is owned by Roscoe Chandler and provides appraisal services to individuals and companies wishing to purchase and sell fine art. Chandler Company began business on January 1, 2018, and is just completing its first year of business. Roscoe asks for your help in completing the accounting cycle for the company by assisting with the closing process.

Chart of Accounts

CHART OF ACCOUNTS

Chandler Company

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
16	Prepaid Insurance
18	Equipment
19	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Salaries Payable
24	Income Taxes Payable

	EQUITY
31	Roscoe Chandler, Capital
32	Roscoe Chandler, Drawing

	REVENUE
41	Fees Earned
42	Rent Revenue
43	Interest Revenue

	EXPENSES
51	Salaries Expense
52	Selling Expense
53	Income Taxes Expense
54	Depreciation Expense-Equipment
55	Insurance Expense
59	Miscellaneous Expense

Adjusted Trial Balance

Before the closing entries are made, you begin with an adjusted trial balance. The closing entries are essentially the link from the adjusted trial balance to the post-closing trial balance.

Chandler Company

ADJUSTED TRIAL BALANCE

December 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	67,000.00
2	Accounts Receivable	29,000.00
3	Prepaid Insurance	16,000.00
4	Equipment	60,000.00
5	Accumulated Depreciation-Equipment		40,000.00
6	Accounts Payable		6,000.00
7	Salaries Payable		8,000.00
8	Income Taxes Payable		4,000.00
9	Roscoe Chandler, Capital		13,000.00
10	Roscoe Chandler, Drawing	5,000.00
11	Fees Earned		185,600.00
12	Rent Revenue		92,000.00
13	Interest Revenue		17,200.00
14	Salaries Expense	71,000.00
15	Selling Expense	37,600.00
16	Income Taxes Expense	15,000.00
17	Depreciation Expense-Equipment	47,200.00
18	Insurance Expense	17,000.00
19	Miscellaneous Expense	1,000.00
20	Totals	365,800.00	365,800.00

The final step of the accounting cycle is the closing process. The main goal of this stage of the cycle is to ensure that the balance of each temporary account is returned to zero and that net income is transferred to the owner's capital account. The first step in successfully undertaking the closing process is to understand the difference between a temporary account and a permanent account. Roscoe has some questions about the process.

Answer the following questions (1) - (3).

1. If a temporary account has an ending balance of $67,000, what is its beginning balance for the following accounting period? If there is no amount or an amount is zero, enter 0.

2. If a permanent account has an ending balance of $67,000, what is its beginning balance for the following accounting period?

3. Roscoe will be preparing his yearly financial statements after completing Chandler Companys closing process, and is a somewhat confused about the characteristics of the accounts on his Chart of Accounts. He has started by creating the following chart, and asks for your help in completing it. For each account or type of account listed, choose all descriptions that apply.

	Temporary Account	Permanent Account		Closed to Owners Capital Account
				Yes	No
Revenues
Asset accounts
Expenses
Liability accounts
Owners drawing account