L01,2,3 SUCCESS TIP Note: Accounts 312 to 515 are temporary accounts. That means they will be zeroed out at the end of the period. DEMONSTRATION SUMMARY PROBLEM Requirements 1. Journalize transactions and post to ledger. 2. Prepare a worksheet. 3. Prepare financial statements. 4. Journalize adjusting and closing entries and prepare a post-closing trial balance. Assets 111 Cash 112 Accounts Receivable 114 Prepaid Rent 115 Office Supplies 121 Office Equipment 122 Accumulated Depreciation, Office Equipment Liabilities 211 Accounts Payable 212 Salaries Payable Owner's Equity 311 R. Kern, Capital 312 R. Kern, Withdrawals 313 Income Summary Revenue 411 Fees Earned Expenses 511 Salaries Expense 512 Advertising Expense 513 Rent Expense 514 Office Supplies Expense 515 Depreciation Expense, Office Equipment We will use unusually small numbers to simplify calculation and emphasize the theory. 201X Jan. 1 Rolo Kern invested $1,200 cash and $100 of office equipment to open Rolo Co. 1 Paid rent for 3 months in advance, $300. 4 6 Purchased office equipment on account, $50. Bought office supplies for cash, $40. 8 Collected $400 for services rendered. 12 14 16 Paid salaries, $60. 18 Rolo paid his home electric bill from the company checkbook, $20. Provided $100 worth of services to clients who will not pay until next month. Advertising bill received for $70 but will not be paid until next month. Adjustment Data on January 31 A Supplies on hand, $6. B Rent expired, $100. C. Depreciation, Office Equipment, $20. D. Salaries accrued, $50.