Mastery Problem: The Accounting Cycle. Chandler, Inc. Chandler, Inc. is owned by Roscoe Chandler and provides appraisal services to individuals and companies wishing to purchase and sell fine art. Chandler, Inc. began business on January 1, 2017, and is just completing its first year of business. Roscoe asks for your help in completing the accounting cycle for the company by assisting with the closing process. Adjusted Trial Balance Before the closing entries are journalized, you begin with an adjusted trial balance. The closing entries are essentially the link from the adjusted trial balance to the post-closing trial balance. Chandler, Inc. Adjusted Trial Balance December 31, 2017 Account Title Debit Balances Credit Balances Cash 93,000 Accounts Receivable 29,000 Prepaid Insurance 16,000 Office Equipment 60,000 Accumulated Depreciation Office Equipment 40,000 Accounts Payable 6,000 Salaries Payable 8,000 Income Taxes Payable 4,000 Common Stock 2,000 Retained Earnings 25,000 Dividends 5,000 Fees Earned 185,600 Rent Revenue 92,000 Interest Revenue 17,200 Salaries Expense 71,000 Selling Expense 25,600 Income Taxes Expense 15,000 Insurance Expense 17,000 Depreciation Expense 47,200 Miscellaneous Expense 1,000 379,800 379,800 The Closing Process The Closing Process The final step of the accounting cycle is the closing process. The main goal of this stage of the cycle is to ensure that the balance of each temporary account is returned to zero and that net income is transferred to the retained earnings account. The first step in successfully undertaking the closing process is to understand the difference between a temporary account and a permanent account. Roscoe has some questions about the process. Answer the following questions (1)-(3). If an amount is zero, enter "0". 1. If a temporary account has an ending balance of $62,000, what is its beginning balance for the following accounting period? 2. If a permanent account has an ending balance of $62,000, what is its beginning balance for the following accounting period? 3. Roscoe will be preparing his yearly financial statements after completing Chandler, Inc.'s closing process, and is somewhat confused about the characteristics of the accounts. He has started by creating the following chart, and asks for your help in completing it. (Select "Yes" or "No" from the below dropdowns.) Temporary Permanent Closed to Account Account Retained Earnings Revenues Asset accounts Expenses Liability accounts Dividends account Roscoe's Journal