Question
GerdesPsychological Services, Inc. closes its temporary accounts once each year on December 31. The company issued the following income statement as part of its annual
GerdesPsychological Services, Inc. closes its temporary accounts once each year on December 31. The company issued the following income statement as part of its annual report.
GERDES PSYCHOLOGICAL SERVICES, INC.
Income Statement
For the year ended December 31,2017
Revenue:
Counseling revenue
Cr:$225,000
Expenses:
>Advertising expense
Dr:$1800
>Salaries expense
Dr:94000
>Office supplies expense
Dr:1200
>Utilities expense
Dr:850
>Office rent expense
Dr:24000
>Malpractice insurance expense
Dr:6000
>Continuing education expense
Dr:2650
>Depreciation expense: fixtures
Dr:4500
>Miscellaneous expense
Dr:6000
>Income tax expense
Dr:29400
Cr:170,400
Net income
Cr:$ 54,600
The firm's statement of retained earnings indicates that a $6000 cash dividendwas declared and paid during 2017.
- Prepare the necessary adjusting entries on December 31, 2017
- If the firm's Retained earning had a $92,000 balance on January 1, 2017, at what amount should retained earnings be reported in the firm's balance sheet dated December 31, 2017
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Financial Accounting Tools for Business Decision Making
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
9th edition
1-119-49356-3, 1119493633, 1119493560, 978-1119493631
