Financial Statements and Closing Entries

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 20Y9, 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, 20Y9
	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
Common Stock		25,000
Retained Earnings		195,000
Dividends	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
Utilities 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

Required:

1. Prepare an income statement.

The Gorman Group Income Statement For the Year Ended October 31, 20Y9
Revenues:
	$
Total revenues		$
Expenses:
	$
Total expenses
		$

Prepare a statement of stockholders equity. During the year, no additional common stock was issued. If an amount box does not require an entry, leave it blank. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

The Gorman Group Statement of Stockholders Equity For the Year Ended October 31, 20Y9
	Common Stock	Retained Earnings	Total
	$	$	$
	$	$	$

Prepare a balance sheet.

The Gorman Group Balance Sheet October 31, 20Y9
Assets				Liabilities
Current assets:				Current liabilities:
		$			$
				Total liabilities		$
Total current assets			$
Property, plant, and equipment:				Stockholders' Equity
		$			$
	$
	$
Total property, plant, and equipment				Total stockholders' equity
Total assets			$	Total liabilities and stockholders' equity		$

2. 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.

Date	Account	Debit	Credit
20Y9 Oct. 31
20Y9 Oct. 31

3. If the balance of Retained Earnings had instead increased $115,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? Enter the amount as positive number. $