Chapter 6 The Accounting Cycle: Statements and Closing Entries 242 AP-7B LO 1 2 3 High Flying Biplane has completed all its journal entries and adjusting entries for the month of June 2018. The chart of accounts and adjusted trial balance are shown below. Account Description Account # ASSETS Cash 101 Accounts Receivable 105 Prepaid Insurance 110 Equipment 120 Accumulated DepreciationEquipment 125 LIABILITIES Accounts Payable 200 Interest Payable 205 Unearned Revenue 210 Notes Payable 215 OWNERS EQUITY Singh, Capital 300 Singh, Withdrawals 310 Income Summary 315 Account Description Account # REVENUE Service Revenue 400 EXPENSES Advertising Expense 500 Depreciation Expense 510 Insurance Expense 515 Interest Expense 520 Telephone Expense 550 High Flying Biplane Adjusted Trial Balance June 30, 2018 Account Title DR CR Cash $8,800 Accounts Receivable 6,800 Prepaid Insurance 1,100 Equipment 64,000 Accumulated DepreciationEquipment $450 Accounts Payable 7,700 Interest Payable 75 Unearned Revenue 4,080 Notes Payable 19,000 Singh, Capital 48,800 Singh, Withdrawals 1,200 Service Revenue 3,020 Advertising Expense 400 Depreciation Expense 450 Insurance Expense 100 Interest Expense 75 Telephone Expense 200 Total $83,125 $83,125 Note: The daily transactions and adjustments for the month of June have already been posted in the general ledger. You are only responsible for posting the closing entries. Recall that the owner invested $5,000 into the business during the month. The Accounting Cycle: Statements and Closing Entries Chapter 6 243 Required a) Prepare the income statement. b) Prepare the statement of owners equity. c) Prepare the balance sheet. Chapter 6 The Accounting Cycle: Statements and Closing Entries 244 d) Create the closing entries using the income summary account and post the closing entries to the ledger accounts on the next page. Date Account Title and Explanation PR Debit Credit e) Prepare the post-closing trial balance.