Financial Statements and Closing Entries

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 20Y3, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:

The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 20Y3

		Adjusted Trial Balance
Account Title	Dr.	Cr.
Cash	11,000
Accounts Receivable	28,150
Supplies	6,350
Prepaid Insurance	9,500
Land	75,000
Buildings	250,000
Accumulated Depreciation - Buildings		117,200
Equipment	240,000
Accumulated Depreciation - Equipment		151,700
Accounts Payable		33,300
Salaries Payable		3,300
Unearned Rent		1,500
Nicole Gorman, Capital		220,000
Nicole Gorman, Drawing	20,000
Service Fees		468,000
Rent Revenue		5,000
Salaries Expense	291,000
Depreciation Expense - Equipment	17,500
Rent Expense	15,500
Supplies Expense	9,000
Utility Expense	8,500
Depreciation Expense - Buildings	6,600
Repairs Expense	3,450
Insurance Expense	3,000
Miscellaneous Expense	5,450
	1,000,000	1,000,000

1. Prepare an income statement.

2. Prepare a statement of owner's equity (no additional investments were made during the year).

3. Prepare a balance sheet.

4. Journalize the entries that were required to close the accounts at October 31. If an amount box does not require an entry, leave it blank.

5. If the balance of Nicole Gorman, Capital had instead increased $115,000 after the closing entries were posted and the withdrawals remained the same, what would have been the amount of net income or net loss?