he unadjusted trial balance of PS Music as of July 31, 2018, along with the adjustment data for the two months ended July 31, 2018, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared:

PS Music

ADJUSTED TRIAL BALANCE

July 31, 2018

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	9,945.00
2	Accounts Receivable	4,150.00
3	Supplies	275.00
4	Prepaid Insurance	2,475.00
5	Office Equipment	7,500.00
6	Accumulated Depreciation-Office Equipment		50.00
7	Accounts Payable		8,350.00
8	Wages Payable		140.00
9	Unearned Revenue		3,600.00
10	Common Stock		9,000.00
11	Dividends	1,750.00
12	Fees Earned		21,200.00
13	Wages Expense	2,940.00
14	Office Rent Expense	2,550.00
15	Equipment Rent Expense	1,375.00
16	Utilities Expense	1,215.00
17	Music Expense	3,610.00
18	Advertising Expense	1,500.00
19	Supplies Expense	925.00
20	Insurance Expense	225.00
21	Depreciation Expense	50.00
22	Miscellaneous Expense	1,855.00
23	Totals	42,340.00	42,340.00

Required:

1.

(Optional) Using the data from Chapter 3, prepare an end-of-period spreadsheet on a sheet of paper or using spreadsheet software.

2.

Prepare an income statement, a retained earnings statement, and a balance sheet.*

3.

A.	Journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.
B.	Post the closing entries. The income summary account is #34 in the ledger of PS Music. Indicate closed accounts by inserting a 0 (zero) in either of the Balance columns opposite the closing entry. No entry is required in the Item column.

4.

Prepare a post-closing trial balance.

*	For guidance in completing the financial statements, be sure to read the instructions above each statement carefully.

Chart of Accounts

CHART OF ACCOUNTS

PS Music

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
14	Supplies
15	Prepaid Insurance
17	Office Equipment
18	Accumulated Depreciation-Office Equipment

	LIABILITIES
21	Accounts Payable
22	Wages Payable
23	Unearned Revenue

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends
34	Income Summary

	REVENUE
41	Fees Earned

	EXPENSES
50	Wages Expense
51	Office Rent Expense
52	Equipment Rent Expense
53	Utilities Expense
54	Music Expense
55	Advertising Expense
56	Supplies Expense
57	Insurance Expense
58	Depreciation Expense
59	Miscellaneous Expense

Labels and Amount Descriptions

Labels
Cash flows from financing activities
Cash flows from investing activities
Cash flows from operating activities
Current assets
Current liabilities
Expenses
For the Two Months Ended July 31, 2018
July 31, 2018
Property, plant, and equipment
Amount Descriptions
Change in retained earnings
Net decrease in cash during June and July
Net increase in cash during June and July
Net income
Net loss
Retained earnings, June 1, 2018
Retained earnings, July 31, 2018
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and stockholders equity
Total property, plant, and equipment
Total stockholders equity

Income Statement

2. Prepare an income statement. Refer to the Chart of Accounts and the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred, enter that amount as a negative number using a minus sign. A colon (:) will automatically appear if it is required.

2. Prepare a retained earnings statement. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. If a net loss is incurred or there is a decrease in owners equity, enter that amount as a negative number using a minus sign.

2. Prepare a classified balance sheet. Refer to the Chart of Accounts and the Labels and Amount Descriptions list for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less: or Plus: will automatically appear if it is required.

3. A. Journalize the closing entries. (Please note that pages 1, 2, and 3 show the transactions and adjusting entries that were recorded in Continuing Problems 2 and 3.) Refer to the Chart of Accounts for exact wording of account titles.

3. B. Post the closing entries. The income summary account is #34 in the ledger of PS Music. Indicate closed accounts by inserting a 0 (zero) in either of the Balance columns opposite the closing entry. Do not put an entry in the Item column.

4. Prepare a post-closing trial balance.