The unadjusted trial balance of PS Music as of July 31, 2016, along with the adjustment data for the two months ended July 31, 2016, are shown in Chapter 3. Based upon the adjustment data, the following adjusted trial balance was prepared:

1. (Optional) Using the data from Chapter 3, prepare an endofperiod 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 postclosing trial balance. * For guidance in completing the financial statements, be sure to read the instructions above each statement carefully. Instructions PS Music ADJUSTED TRIAL BALANCE 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 Retained Earnings 12 Dividends 1,750.00 13 Income Summary 14 Fees Earned 21,200.00 15 Wages Expense 2,940.00 16 Office Rent Expense 2,550.00 17 Equipment Rent Expense 1,375.00 18 Utilities Expense 1,215.00 19 Music Expense 3,610.00 20 Advertising Expense 1,500.00 21 Supplies Expense 925.00 22 Insurance Expense 225.00 23 Depreciation Expense 50.00 24 Miscellaneous Expense 1,855.00 25 Totals 42,340.00 42,340.00

CHART OF ACCOUNTS PS Music General Ledger ASSETS 11 Cash 12 Accounts Receivable 14 Supplies 15 Prepaid Insurance 17 Office Equipment 18 Accumulated DepreciationOffice 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

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, 2016 July 31, 2016. Property, plant, and equipment. Amount Descriptions. Add dividends. Decrease in retained earnings. Increase in retained earnings. Net decrease in cash during June and July. Net increase in cash during June and July. Less dividends. Net income. Net loss Retained earnings, June 1, 2016 Retained earnings, July 31, 2016. Total assets. Total current assets. Total expenses. Total liabilities. Total liabilities and stockholders equity. Total property, plant, and equipment. Total stockholders equity. Labels and Amount Descriptions. 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 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 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. PS Music Income Statement (Label) 1 Fees earned $21,200.00 2 Less: 3 4 5 6 7 8 9 10 11 12 13 14 Retained Earnings Statement PS Music Retained Earnings Statement (Label) 1 2 3 4 5 Balance Sheet PS Music Balance Sheet (Label) 1 Assets 2 (Label) 3 4 5 3.

A. Journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles. 6 7 8 (Label) 9 10 11 12 13 Liabilities 14 (Label) 15 16 17 18 19 Stockholders Equity 20 21 22 23 Journal PAGE 1 PAGE 2 PAGE 3 PAGE 4 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 Closing Entries 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Ledger

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.

4. Prepare a postclosing trial balance.

July 31, 2016 LEDGER Account: Cash Account No. 11 Account: Accounts Receivable Account No. 12 Account: Supplies Account No. 14 Account: Prepaid Insurance Account No. 15 Account: Office Equipment Account No. 17 Account: Accumulated DepreciationOffice Equipment Account No. 18 Account: Accounts Payable Account No. 21 Account: Wages Payable Account No. 22 Account: Unearned Revenue Account No. 23 Account: Common Stock Account No. 31 Account: Retained Earnings Account No. 32 Account: Dividends Account No. 33 Account: Income Summary Account No. 34 Account: Fees Earned Account No. 41 Account: Wages Expense Account No. 50 Account: Office Rent Expense Account No. 51 Account: Equipment Rent Expense Account No. 52 Account: Utilities Expense Account No. 53 Account: Music Expense Account No. 54 Account: Advertising Expense Account No. 55 Account: Supplies Expense Account No. 56 Account: Insurance Expense Account No. 57 Account: Depreciation Expense Account No. 58 Account: Miscellaneous Expense Account No. 59

PostClosing Trial Balance PS Music

POSTCLOSING TRIAL BALANCE ACCOUNT TITLE DEBIT CREDIT

1 Cash

2 Accounts Receivable

3 Supplies

4 Prepaid Insurance

5 Office Equipment

6 Accumulated Depreciation-Office Equipment

7 Accounts Payable

8 Wages Payable

9 Unearned Revenue

10 Common Stock

11 Retained Earnings

12 Dividends

13 Income Summary

14 Totals