CHAPTER 5: CLOSING ENTRIES AND THE POST-CLOSING TRIAL BALANCE Accounting Cycle Review: Problem A This problem is designed to enable you to apply the knowledge you have acquired in the preceding chapters. In accounting, the ultimate test is being able to handle data in real- life situations. This problem will give you valuable experience. CHART OF ACCOUNTS Assets 111 Cash 112 Accounts Receivable 114 Prepaid Insurance 121 Land 122 Building 123 Accumulated Depreciation, Building 124 Pool/Slide Facility 125 Accumulated Depreciation, Pool/ Slide Facility 126 Pool Furniture 127 Accumulated Depreciation, Pool Furniture Liabilities 221 Accounts Payable 222 Wages Payable 223 Mortgage Payable Owner's Equity 311 L. Judar, Capital 312 L. Judar, Drawing 313 Income Summary Revenue 411 Income from Services 412 Concessions Income Expenses 511 Pool Maintenance Expense 512 Wages Expense 513 Advertising Expense 514 Utilities Expense 515 Interest Expense 517 Insurance Expense 518 Depreciation Expense, Building 519 Depreciation Expense, Pool/Slide Facility 520 Depreciation Expense, Pool Furniture 522 Miscellaneous Expense ou are to record transactions in a two-column general journal. Assume that the fiscal period is one month. You will then be able to complete all of the steps in the accounting ycle. When you are analyzing the transactions, think them through by visualizing the accounts or by writing them down on scratch paper. For unfamiliar types of ansactions, specific instructions for recording them are included. However, reason em out for yourself as well. Check off each transaction as it is recorded. ly 1 Judar deposited $135,000 in a bank account for the purpose of buying Blast Off! The business is a recreation area offering three large waterslides (called "tubes")-one children's slide, an inner tube run, and a looping extreme slide. 2 Bought Blast Off! in its entirety for a total price of $540,800. The assets include pool furniture, $3,800; the pool/slide facility (includes filter system, pools, pump, and slides), $148,800; building, $96,200; and land, $292,000. Paid $120,000 down and signed a mortgage note for the remainder. 2 Received and paid the bill for a one-year premium for insurance, $12,240. (Continued) CLGL

Accounting Cycle Review: Problem A Accounting Cycle Review: Problem A This problen is Jesigned to enable you to apply the knowled foe you have acquired in the proseding dopters. In accountitg, the ultimate test is being able to handle data in teal. lifestataione This problem will give you valuable experience. TART OF ACCOUNTS You ate to recond transactions in a fwo-column general journal. Assume that the fiscal proiod is ooe month. You will then be able to complete all of the steps in the accounting bice. When you are analyziag the traitsactions, think thers through by visualizing the Tiscounts or by writing them down on scratch paper. For unfamiliar types of trassactions, specific instructions for recording them are included. However, reason then out for yourself as well. Check off each transaction as it is recorded. hy I ladar deposited $135.000 in a bank account for the purpose of buying Blas Offl The business is a recreation area offering three lange waterslides (called "tubes") -one children's stide, an inper tube run, abd a looping extreme alide. 2. Bought Bas Off! in its entirety for a total price of $5%0,800. The aicets. include pool furniture, $3.800, the poollade facility (includes filter system, pooks, purm, and slides), $148,800; bullding, $96,200; and land, $292.000. Paid $120,000 down and sigsed a mortsage note for the femainder. 2 Recelved and paid the bull for a oneyear premium for insurance, 512,240 , (Gontinuied) PART 1 t The Acoounting orcle for a Sevice flusiness: fuly 2 Bought 125 inner mber from Worn Tires for $1,225, paying the remainder due in 20 days. 3. Signed a contrace with a video game company to lease space for video games and to provide a food concestion. The rental income agreed upon is 10 percent of the revenues generated from the machines and food, with the estimated monthly rental income paid in advance. Received cash payment for July, $250. 5 Received bills totaling $1,320 for the grand opening/Fourth of July party. The bill from Party Rentals for the promotional handouts, balloons, decorations, and prizes was 5620 , and the newspaper advertising bills from the Cily 5 tar were $700. 6 Signed a one-year contruct for the pool maintenance with All-Around Maintenance and paid the maintenance fee for July of $1,600. 6 Paid cash for employe picnic food and beverages, \$128, (Miscellaneous Expense) 7 Received $12,086 in cash as incomse for the use of the facilities. 9 Bought parts to repair the filter system on account from Arlen's Pool Supply, 5646. 14. Received $10,445 in cash as income for the use of the facilities. 15 Paid wages to employees for the period ended July 14,$9,460. 16 Paid 51,150 cash as partial payment on account for promotional expenses recorded on fuly 5. Party Rentals was paid $620 and City Star was paid the remainder of $530. 16 ladar withdrew cash for personal use, $2,500. 17. Boaght additional pool furniture from Pool Suppliers for $2,100; payment duc in 30 days. 18 Paid cash to seamsteess for alterations und repairs to the character costumes. 5328. (Miscellaneous Expense) 21 Received 510,330 in cash as income for the use of the facilities. 21 Paid cash to Worn Tires as partial payment on account, $600. 23 Received a $225 reduction of our account from Pool Suppliers for lawn chain received in damaged condition. 25 Received and paid telephone bill, $292. 29 Paid wages for the period July Is through 28 of $8,227. 3). Received $11,870 in cash as income for the use of the facilities. 31. Paid cash to Arlen's Pool Supply to apply on account, $360. 3) Received and paid water bill, $684. 31. Paid cash as an installment payment on the mortgage, $3,890. Of this arnout $1,910 represents a reduction in the principal and the remainder is interet. II Received and pald electric bill, $942. 31. Bought additional inner tubes from Worn Tires for $480, paying $100 dow with the femainder due in 30 days. 31. ludar withdrew cash for personal use, $3,200. 3) Sales for the video and food concessions amounted to $4.840, and 10 peros of $4,840 equals $484. Because you have already recorded $250 as concesson. income, recond the additional $234 revenue due from the concessionst (Cash was not receired.) Check Figure That balerce tecal \$60 Le4t: net incerove. 516 293; postelosing trial balance total, \$sos,6t4 Required 1. Journalize the transactiona, (Start on page 1 of the general journal if using Excter Working Papen.) 2. Pout the transactions to the ledeng. 3. Prepare a trial balance. (If using a work sheet, use the first two columns.) 4. Data for the adjustments are as follows: a. Insurance expired during the month, $1,020. b. Depreciation of building for the month, $480. c. Depreciation of pool/slide facility for the month, 5675 . d. Depreciation of pool furniture for the month, $220. e. Wages accrued at July 31,$920. Your instructor may want you to use a work sheet for these adjustments. 5. Journalize adjusting entries. 6. Post adjusting entries to the ledger accounts. (Skip this step if using CLGL) 7. Prepare an adjusted trial balance. 8. Prepare the income statement. 9. Prepare the statement of owner's equity. 10. Prepare the balance sheet. 11. Journalize closing entries. 12. Post closing entries to the ledger accounts. (Skip this step if using CLGL.) 13. Prepare a post-closing trial balance