Financial Statements and Closing Entries

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 2019, 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, 2019
	Adjusted Trial Balance
Account Title	Dr.	Cr.
Cash	16,790
Accounts Receivable	36,540
Supplies	5,710
Prepaid Insurance	12,330
Land	130,000
Buildings	467,000
Accumulated Depreciation-Buildings		152,100
Equipment	337,000
Accumulated Depreciation-Equipment		198,100
Accounts Payable		43,220
Salaries Payable		4,280
Unearned Rent		1,940
Nicole Gorman, Capital		554,450
Nicole Gorman, Drawing	32,400
Service Fees		616,390
Rent Revenue		6,510
Salaries Expense	441,900
Depreciation ExpenseEquipment	24,000
Rent Expense	20,100
Supplies Expense	14,220
Utilities Expense	12,850
Depreciation ExpenseBuildings	8,570
Repairs Expense	7,080
Insurance Expense	3,880
Miscellaneous Expense	6,620
	1,576,990	1,576,990

Required:

1. Prepare an income statement.

Gorman Group Income Statement For the Year Ended October 31, 2019
Revenues:
Service fees	$
Rent revenue
Total revenues		$
Expenses:
Salaries expense	$
Depreciation expense-equipment
Rent expense
Supplies expense
Utilities expense
Depreciation expense-buildings
Repairs expense
Insurance expense
Miscellaneous expense
Total expenses
Net income		$

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

Gorman Group Statement of Owner's Equity For the Year Ended October 31, 2019
Nicole Gorman, capital, November 1, 2018		$
Net income for the year	$
Withdrawals
Increase in owner's equity
Nicole Gorman, capital, October 31, 2019		$

Prepare a balance sheet.

Gorman Group Balance Sheet October 31, 2019
Assets				Liabilities
Current assets:				Current liabilities:
Cash		$		Accounts payable	$
Accounts receivable				Salaries payable
Supplies				Unearned rent
Prepaid insurance				Total liabilities		$
Total current assets			$
Property, plant, and equipment:				Owner's Equity
Land		$		Nicole Gorman, capital
Buildings	$
Less accumulated depreciation-buildings
Equipment	$
Less depreciation expense-equipment
Total property, plant, and equipment
Total assets			$	Total liabilities and owner's equity		$

2. Journalize the entries that were required to close the accounts at October 31. For a compound transaction, if an amount box does not require an entry, leave it blank.

Date	Account	Debit	Credit
Oct. 31	Service Fees
	Rent Revenue
	Salaries Expense
	Depreciation ExpenseEquipment
	Rent Expense
	Supplies Expense
	Utilities Expense
	Depreciation ExpenseBuildings
	Repairs Expense
	Insurance Expense
	Miscellaneous Expense
Oct. 31

3. 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? $