Need help understanding how to close entries for revenue and expense accounts, as well as filling out the income statement and balance sheet correctly.
Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2025 . All watches are sold for $860 each. July 17 Purchased 104 watches for $15,600 ( $150 per watch) on account. July31August12Sold76watchesfor$65,360cash.Purchased76watchesfor$12,160($160perwatch)cash. August12August22Sold66watchesfor$56,760onaccount.Purchased76watchesfor$12,160($160 September 19 Paid for watches purchased on July 17. September 27 Receive cash of $34,056 for watches sold on account on August 22. October 27 Purchased 170 watches for $27,540 ( $162 per watch) cash. November 20 Sold 146 watches for $125,560 cash. December 4 Purchased 136 watches for $23,392 (\$172 per watch) on account. December 8 Sold 76 watches for $65,360 on account. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31 , the estimated net realizable value of MU watches is only $100 per watch. 1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 to 14). Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on December 31, 2025, in the 'General Journal' tab. 3. Review the adjusted 'Trial Balance' as of December 31, 2025. 4. Prepare an income statement for the period ended December 31, 2025, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of December 31,2025 in the 'Balance Sheet' tab. Journal entry worksheet 110 13 Record the closing entry for revenue accounts. Note: Enter debits before credits. Journal entry worksheet 1,10 13 Record the closing entry for expense accounts. Note: Enter debits before credits. GREAT ADVENTURES, INCORPORATED Now that operations for outdoor clinics and TEAM events are running smoothly, Suzie thinks of another area for business expansion. She notices that a few clinic participants wear multiuse (MU) watches. Beyond the normal timekeeping features of most watches, MU watches are able to report temperature, altitude, and barometric pressure. MU watches are waterproof, so moisture from kayaking, rain, fishing, or even diving up to 100 feet won't damage them. Suzie decides to have MU watches available for sale at the start of each clinic. The following transactions relate to purchases and sales of watches during the second half of 2025 . All watches are sold for $860 each. July 17 Purchased 104 watches for $15,600 ( $150 per watch) on account. July31August12Sold76watchesfor$65,360cash.Purchased76watchesfor$12,160($160perwatch)cash. August12August22Sold66watchesfor$56,760onaccount.Purchased76watchesfor$12,160($160 September 19 Paid for watches purchased on July 17. September 27 Receive cash of $34,056 for watches sold on account on August 22. October 27 Purchased 170 watches for $27,540 ( $162 per watch) cash. November 20 Sold 146 watches for $125,560 cash. December 4 Purchased 136 watches for $23,392 (\$172 per watch) on account. December 8 Sold 76 watches for $65,360 on account. Late in December, the next generation of multiuse (MU II) watches is released. In addition to all of the features of the MU watch, the MU II watches are equipped with a global positioning system (GPS) and have the ability to download and play songs and videos off the Internet. The demand for the original MU watches is greatly reduced. As of December 31 , the estimated net realizable value of MU watches is only $100 per watch. 1. Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 to 14). Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. 2. Record adjusting entries on December 31, 2025, in the 'General Journal' tab. 3. Review the adjusted 'Trial Balance' as of December 31, 2025. 4. Prepare an income statement for the period ended December 31, 2025, in the 'Income Statement' tab. 5. Prepare a classified balance sheet as of December 31,2025 in the 'Balance Sheet' tab. Journal entry worksheet 110 13 Record the closing entry for revenue accounts. Note: Enter debits before credits. Journal entry worksheet 1,10 13 Record the closing entry for expense accounts. Note: Enter debits before credits. GREAT ADVENTURES, INCORPORATED
