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Exercise 3-5 Determine the amount of net income [LO1] During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2012, you come across se ... veral items needing further consideration. Currently, net income is $100,000. a. An insurance policy covering 12 months was purchased on October 1, 2012, for $18,000. The entire amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2012. b. During 2012, the company received a $2,300 cash advance from a customer for services to be performed in 2013. The $2,300 was incorrectly credited to Service Revenue. c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $2,000 were on hand at December 31, 2012. d. Trojan borrowed $60,000 from a local bank on September 1, 2012. Principal and interest at 12% will be paid on August 31, 2013. No accrual was made for interest in 2012. Required: Using the information in a. through d. above, determine the proper amount of net income as of December 31, 2012. (Omit the "$" sign in your response.) Net income $ 92,800 Worksheet Exercise 3-5 Determine the amount of net income [LO1] Learning Objective: 03-01 Record revenues using the revenue recognition principle and expenses using the matching principle. Exercise 3-5 Determine the amount of net income [LO1] During the course of your examination of the financial statements of Trojan Corporation for the year ended December 31, 2012, you come across several items needing further consideration. Currently, net income is $100,000. a. An insurance policy covering 12 months was purchased on October 1, 2012, for $18,000. The entire amount was debited to Prepaid Insurance and no adjusting entry was made for this item in 2012. b. During 2012, the company received a $2,300 cash advance from a customer for services to be performed in 2013. The $2,300 was incorrectly credited to Service Revenue. c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $2,000 were on hand at December 31, 2012. d. Trojan borrowed $60,000 from a local bank on September 1, 2012. Principal and interest at 12% will be paid on August 31, 2013. No accrual was made for interest in 2012. Required: Using the information in a. through d. above, determine the proper amount of net income as of December 31, 2012. (Omit the "$" sign in your response.) Net income $ 92,800 ± 0.05% Explanation: Net income (unadjusted) $100,000 a. Record insurance expense of $1,500 per month (4,500) b. Reclassify service revenue as unearned revenue (liability) (2,300) c. Reclassify supplies expense as supplies (asset) 2,000 d. Record interest expense of $600 per month (1.00% of $60,000) (2,400) Net income (adjusted) $ 92,800 2. aw ard: 4 out of 4 points Exercise 3-7 Record adjusting entries [LO3] Golden Eagle Company prepares monthly financial statements for its bank. The November 30 and December 31 adjusted trial balances include the following account information: November 30 December 31 Debit Credit Debit Credit Supplies 2,000 4,000 Prepaid insurance 5,000 4,000 Salaries payable 13,000 17,500 Unearned rent revenue 2,000 1,000 The following information also is known: a. Purchases of supplies in December total $4,600. b. No insurance payments are made in December. c. $13,000 is paid to employees during December for November salaries. d. On November 1, a tenant pays Golden Eagle $3,000 in advance rent for the period November through January. Unearned Revenue is credited. Required: Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31. (Omit the "$" sign in your response.) Event General Journal Debit Credit a. Supplies expense 2,600 Supplies 2,600 b. Insurance expense 1,000 Prepaid insurance 1,000 c. Salaries expense 17,500 Salaries payable 17,500 d. Unearned revenue 1,000 Service revenue 1,000 Worksheet Exercise 3-7 Record adjusting entries [LO3] Learning Objective: 03-03 Demonstrate the purposes and recording of adjusting entries. Exercise 3-7 Record adjusting entries [LO3] Golden Eagle Company prepares monthly financial statements for its bank. The November 30 and December 31 adjusted trial balances include the following account information: November 30 December 31 Debit Credit Debit Credit Supplies 2,000 4,000 Prepaid insurance 5,000 4,000 Salaries payable 13,000 17,500 Unearned rent revenue 2,000 1,000 The following information also is known: a. Purchases of supplies in December total $4,600. b. No insurance payments are made in December. c. $13,000 is paid to employees during December for November salaries. d. On November 1, a tenant pays Golden Eagle $3,000 in advance rent for the period November through January. Unearned Revenue is credited. Required: Show the adjusting entries that were made for supplies, prepaid insurance, salaries payable, and unearned revenue on December 31. (Omit the "$" sign in your response.) Event General Journal Debit Credit a. Supplies expense 2,600 Supplies 3. aw ard: 4 out of 4 points aw ard: Supplies 2,600 b. Insurance expense 1,000 Prepaid insurance 1,000 c. Salaries expense 17,500 Salaries payable 17,500 d. Unearned revenue 1,000 Service revenue 1,000 Exercise 3-8 Record year-end adjusting entries [LO3] Consider the following transactions for Huskies Insurance Company: a. Equipment costing $43,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,500 per year. b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 7% are due in one year. c. On October 1, the company receives $15,000 from a customer for a one-year property insurance policy. Unearned Revenue is credited. Required: For each item, record the necessary adjusting entry for Huskies Insurance at its year-end of December 31. No adjusting entries were made during the year. (Do not round your intermediate calculations. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Depreciation expense 6,500 Accumulated depreciation 6,500 b. Interest receivable 1,575 Interest revenue 1,575 c. Unearned revenue 3,750 Service revenue 3,750 Worksheet Exercise 3-8 Record year-end adjusting entries [LO3] Learning Objective: 03-03 Demonstrate the purposes and recording of adjusting entries. Exercise 3-8 Record year-end adjusting entries [LO3] Consider the following transactions for Huskies Insurance Company: a. Equipment costing $43,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,500 per year. b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 7% are due in one year. c. On October 1, the company receives $15,000 from a customer for a one-year property insurance policy. Unearned Revenue is credited. Required: For each item, record the necessary adjusting entry for Huskies Insurance at its year-end of December 31. No adjusting entries were made during the year. (Do not round your intermediate calculations. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Depreciation expense 6,500 Accumulated depreciation 6,500 b. Interest receivable 1,575 Interest revenue 1,575 c. Unearned revenue 3,750 Service revenue 3,750 4. aw ard: 4 out of 4 points 5. aw ard: 3 out of 3 points Exercise 3-9 Calculate the effects of adjusting entries on net income [LO3] Consider the following transactions for Huskies Insurance Company: a. Equipment costing $46,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,500 per year. b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 6% are due in one year. c. On October 1, the company receives $12,000 from a customer for a one-year property insurance policy. Unearned Revenue is credited. Required: Indicate by how much net income in the income statement is higher or lower if the adjustment is not recorded. (Do not round your intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.) Transaction Net Income (a) $ 6,500 Higher (b) $ 1,350 Lower (c) $ 3,000 Lower Worksheet Exercise 3-9 Calculate the effects of adjusting entries on net income [LO3] Learning Objective: 03-03 Demonstrate the purposes and recording of adjusting entries. Exercise 3-9 Calculate the effects of adjusting entries on net income [LO3] Consider the following transactions for Huskies Insurance Company: a. Equipment costing $46,000 is purchased at the beginning of the year for cash. Depreciation on the equipment is $6,500 per year. b. On June 30, the company lends its chief financial officer $45,000; principal and interest at 6% are due in one year. c. On October 1, the company receives $12,000 from a customer for a one-year property insurance policy. Unearned Revenue is credited. Required: Indicate by how much net income in the income statement is higher or lower if the adjustment is not recorded. (Do not round your intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.) Transaction Net Income (a) $ 6,500 Higher (b) $ 1,350 Lower (c) $ 3,000 Lower Explanation: If the adjusting entry is NOT made: Revenues − Expenses = Net Income (a) $ 0 − −$ 6,500 = +$6,500 (b) − 1,350 − 0 = −1,350 (c) − 3,000 − 0 = −3,000 Total +$2,150 Exercise 3-11 Calculate the effects of adjusting entries on the accounting equation [LO3, 4] Consider the following situations for Shocker: a. On November 28, 2012, Shocker receives a $3,300 payment from a customer for services to be rendered evenly over the next three months. Unearned Revenue is credited. b. On December 1, 2012, the company pays a local radio station $2,700 for 30 radio ads that were to be c aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited. . Employee salaries for the month of December totaling $7,530 will be paid on January 7, 2013. 6. aw ard: 3 out of 3 points c. Employee salaries for the month of December totaling $7,530 will be paid on January 7, 2013. d. On August 31, 2012, Shocker borrows $59,100 from a local bank. A note is signed with principal and 8% interest to be paid on August 31, 2013. Required: For each of the adjustments recorded indicate by how much the assets, liabilities, and stockholders' equity in the December 31, 2012, balance sheet is higher or lower if the adjustment is not recorded. (Do not round your intermediate calculations. Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Assets = Liabilities + Stockholders' Equity a. $ 0 None $ 1,100 Higher $ 1,100 Lower b. 900 Higher 0 None 900 Higher c. 0 None 7,530 Lower 7,530 Higher d. 0 None 1,576 Lower 1,576 Higher Total $ 900 Higher $ 8,006 Lower $ 8,906 Higher rev: 03-10-2011 Worksheet Learning Objective: 03-03 Demonstrate the purposes and recording of adjusting entries. Exercise 3-11 Calculate the effects of adjusting entries on the accounting equation [LO3, 4] Learning Objective: 03-04 Post adjusting entries and prepare an adjusted trial balance. Exercise 3-11 Calculate the effects of adjusting entries on the accounting equation [LO3, 4] Consider the following situations for Shocker: a. On November 28, 2012, Shocker receives a $3,300 payment from a customer for services to be rendered evenly over the next three months. Unearned Revenue is credited. b. On December 1, 2012, the company pays a local radio station $2,700 for 30 radio ads that were to be aired, 10 per month, throughout December, January, and February. Prepaid Advertising is debited. c. Employee salaries for the month of December totaling $7,530 will be paid on January 7, 2013. d. On August 31, 2012, Shocker borrows $59,100 from a local bank. A note is signed with principal and 8% interest to be paid on August 31, 2013. Required: For each of the adjustments recorded indicate by how much the assets, liabilities, and stockholders' equity in the December 31, 2012, balance sheet is higher or lower if the adjustment is not recorded. (Do not round your intermediate calculations. Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Assets = Liabilities + Stockholders' Equity a. $ 0 None $ 1,100 Higher $ 1,100 Lower b. 900 Higher 0 None 900 Higher c. 0 None 7,530 Lower 7,530 Higher d. 0 None 1,576 Lower 1,576 Higher Total $ 900 Higher $ 8,006 Lower $ 8,906 Higher rev: 03-10-2011 Exercise 3-12 Record year-end adjusting entries [LO3] Below are transactions for Wolverine Company during 2012. a. On December 1, 2012, Wolverine receives $2,400 cash from a company that is renting office space from Wolverine. The payment, representing rent for December and January, is credited to Unearned Revenue. b. Wolverine purchases a one-year property insurance policy on July 1, 2012, for $11,000. The payment is debited to Prepaid Insurance for the entire amount. c. Employee salaries of $2,000 for the month of December will be paid in early January 2013. d. On November 1, 2012, the company borrows $9,000 from a bank. The loan requires principal and interest at 12% to be paid on October 30, 2013. e. Office supplies at the beginning of 2012 total $960. On August 15, Wolverine purchases an additional $2,000 of office supplies, debiting the Supplies account. By the end of the year, $500 of office supplies remains. Required: 7. aw ard: 3 out of 3 points Required: Record the necessary adjusting entries at December 31, 2012, for Wolverine Company. You do not need to record transactions made during the year. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. (Do not round your intermediate calculations. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Unearned revenue 1,200 Service revenue 1,200 b. Insurance expense 5,500 Prepaid insurance 5,500 c. Salaries expense 2,000 Salaries payable 2,000 d. Interest expense 180 Interest payable 180 e. Supplies expense 2,460 Supplies 2,460 Worksheet Exercise 3-12 Record year-end adjusting entries [LO3] Learning Objective: 03-03 Demonstrate the purposes and recording of adjusting entries. Exercise 3-12 Record year-end adjusting entries [LO3] Below are transactions for Wolverine Company during 2012. a. On December 1, 2012, Wolverine receives $2,400 cash from a company that is renting office space from Wolverine. The payment, representing rent for December and January, is credited to Unearned Revenue. b. Wolverine purchases a one-year property insurance policy on July 1, 2012, for $11,000. The payment is debited to Prepaid Insurance for the entire amount. c. Employee salaries of $2,000 for the month of December will be paid in early January 2013. d. On November 1, 2012, the company borrows $9,000 from a bank. The loan requires principal and interest at 12% to be paid on October 30, 2013. e. Office supplies at the beginning of 2012 total $960. On August 15, Wolverine purchases an additional $2,000 of office supplies, debiting the Supplies account. By the end of the year, $500 of office supplies remains. Required: Record the necessary adjusting entries at December 31, 2012, for Wolverine Company. You do not need to record transactions made during the year. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. (Do not round your intermediate calculations. Round your answers to the nearest dollar amount. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Unearned revenue 1,200 Service revenue 1,200 b. Insurance expense 5,500 Prepaid insurance 5,500 c. Salaries expense 2,000 Salaries payable 2,000 d. Interest expense 180 Interest payable 180 e. Supplies expense 2,460 Supplies 2,460 Exercise 3-13 Record year-end adjusting entries [LO3] Below are transactions for Hurricane Company during 2012. a. On October 1, 2012, Hurricane lends $6,800 to another company. The other company signs a note indicating principal and 8% interest will be paid to Hurricane on September 30, 2013. b. On November 1, 2012, Hurricane pays its landlord $3,900 representing rent for the months of November b. On November 1, 2012, Hurricane pays its landlord $3,900 representing rent for the months of November through January. The payment is debited to Prepaid Rent for the entire amount. c. On August 1, 2012, Hurricane collects $15,600 in advance from another company that is renting a portion of Hurricane’s factory. The $15,600 represents one year's rent and the entire amount is credited to Unearned Revenue. d. Depreciation on machinery is $4,300 for the year. e. Salaries for the year earned by employees but not paid to them or recorded are $5,000. f. Hurricane begins the year with $1,100 in supplies. During the year, the company purchases $4,600 in supplies and debits that amount to Supplies. At year-end, supplies costing $2,000 remain on hand. Required: Record the necessary adjusting entries at December 31, 2012, for Hurricane Company for each of the situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. (Do not round your intermediate calculations. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Interest receivable 136 Interest revenue 136 b. Rent expense 2,600 Prepaid rent 2,600 c. Unearned revenue 6,500 Service revenue 6,500 d. Depreciation expense 4,300 Accumulated depreciation 4,300 e. Salaries expense 5,000 Salaries payable 5,000 f. Supplies expense 3,700 Supplies 3,700 Worksheet Exercise 3-13 Record year-end adjusting entries [LO3] Learning Objective: 03-03 Demonstrate the purposes and recording of adjusting entries. Exercise 3-13 Record year-end adjusting entries [LO3] Below are transactions for Hurricane Company during 2012. a. On October 1, 2012, Hurricane lends $6,800 to another company. The other company signs a note indicating principal and 8% interest will be paid to Hurricane on September 30, 2013. b. On November 1, 2012, Hurricane pays its landlord $3,900 representing rent for the months of November through January. The payment is debited to Prepaid Rent for the entire amount. c. On August 1, 2012, Hurricane collects $15,600 in advance from another company that is renting a portion of Hurricane’s factory. The $15,600 represents one year's rent and the entire amount is credited to Unearned Revenue. d. Depreciation on machinery is $4,300 for the year. e. Salaries for the year earned by employees but not paid to them or recorded are $5,000. f. Hurricane begins the year with $1,100 in supplies. During the year, the company purchases $4,600 in supplies and debits that amount to Supplies. At year-end, supplies costing $2,000 remain on hand. Required: Record the necessary adjusting entries at December 31, 2012, for Hurricane Company for each of the situations. Assume that no financial statements were prepared during the year and no adjusting entries were recorded. (Do not round your intermediate calculations. Omit the "$" sign in your response.) Event General Journal Debit Credit a. Interest receivable 136 Interest revenue 136 b. Rent expense 2,600 Prepaid rent 2,600 c. Unearned revenue 6,500 Service revenue 6,500 d. Depreciation expense 4,300 Accumulated depreciation 4,300 e. Salaries expense 5,000 Salaries payable 5,000 8. aw ard: 3 out of 3 points 9. aw ard: 3 out of 3 points f. Supplies expense 3,700 Supplies 3,700 Exercise 3-15 Calculate the balance of retained earnings [LO5] Below are the restated amounts of net income and retained earnings for Volunteers Inc. and Raiders Inc. for the period 2003−2012. Volunteers began operations in 2004. Calculate the balance of retained earnings each year for each company. Neither company paid dividends during this time.(Enter your answers in millions. Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) VOLUNTEERS INC. ($ in millions) RAIDERS INC. ($ in millions) Year Net Income (Loss) Retained Earnings Net Income (Loss) Retained Earnings 2003 — $0 $ 32 $7 2004 $ 20 20 (55) (48 ) 2005 (5) 15 69 21 2006 26 41 43 64 2007 130 171 92 156 2008 25 196 127 283 2009 (155) 41 (52) 231 2010 565 606 63 294 2011 349 955 96 390 2012 379 1,334 149 539 Worksheet Exercise 3-15 Calculate the balance of retained earnings [LO5] Learning Objective: 03-05 Prepare financial statements using the adjusted trial balance. Exercise 3-15 Calculate the balance of retained earnings [LO5] Below are the restated amounts of net income and retained earnings for Volunteers Inc. and Raiders Inc. for the period 2003−2012. Volunteers began operations in 2004. Calculate the balance of retained earnings each year for each company. Neither company paid dividends during this time.(Enter your answers in millions. Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) VOLUNTEERS INC. ($ in millions) RAIDERS INC. ($ in millions) Year Net Income (Loss) Retained Earnings Net Income (Loss) Retained Earnings 2003 — $0 $ 32 $7 2004 $ 20 20 (55) ( 48 ) 2005 (5) 15 69 21 2006 26 41 43 64 2007 130 171 92 156 2008 25 196 127 283 2009 (155) 41 (52) 231 2010 565 606 63 294 2011 349 955 96 390 2012 379 1,334 149 539 Exercise 3-17 Record closing entries [LO6] Seminoles Corporation’s fiscal year-end is December 31, 2012. The following is a partial adjusted trial Seminoles Corporation’s fiscal year-end is December 31, 2012. The following is a partial adjusted trial balance as of December 31. Debit Credit Retained earnings $26,000 Dividends $ 2,300 Service revenue 48,000 Interest revenue 5,900 Salaries expense 12,900 Rent expense 3,100 Advertising expense 1,700 Depreciation expense 9,000 Interest expense 2,400 Required: Prepare the necessary closing entries. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31, 2012 Service revenue 48,000 Interest revenue 5,900 Retained earnings 53,900 Retained earnings 29,100 Interest expense 2,400 Rent expense 3,100 Salaries expense 12,900 Depreciation expense 9,000 Advertising expense 1,700 Retained earnings 2,300 Dividends 2,300 Worksheet Exercise 3-17 Record closing entries [LO6] Learning Objective: 03-06 Demonstrate the purposes and recording of closing entries. Exercise 3-17 Record closing entries [LO6] Seminoles Corporation’s fiscal year-end is December 31, 2012. The following is a partial adjusted trial balance as of December 31. Debit Credit Retained earnings $26,000 Dividends $ 2,300 Service revenue 48,000 Interest revenue 5,900 Salaries expense 12,900 Rent expense 3,100 Advertising expense 1,700 Depreciation expense 9,000 Interest expense 2,400 Required: Prepare the necessary closing entries. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31, 2012 Service revenue 48,000 Interest revenue 5,900 Retained earnings 53,900 Retained earnings 29,100 Salaries expense 12,900 Rent expense 3,100 Advertising expense 1,700 10. aw ard: 3 out of 3 points Depreciation expense 9,000 Interest expense 2,400 Retained earnings 2,300 Dividends 2,300 Exercise 3-18 Record closing entries [LO6] Laker Incorporated's fiscal year-end is December 31, 2012. The following is an adjusted trial balance as of December 31. Accounts Debit Credit Cash $ 14,000 Supplies 39,000 Prepaid rent 25,000 Accounts payable $ 3,500 Notes payable 24,000 Common stock 41,000 Retained earnings 4,000 Dividends 4,000 Service revenue 64,000 Salaries expense 21,500 Advertising expense 15,000 Rent expense 9,500 Utilities expense 8,500 Totals $136,500 $ 136,500 Required: Prepare the necessary closing entries. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31, 2012 Service revenue 64,000 Retained earnings 64,000 Retained earnings 54,500 Salaries expense 21,500 Advertising expense 15,000 Rent expense 9,500 Utilities expense 8,500 Retained earnings 4,000 Dividends 4,000 Worksheet Exercise 3-18 Record closing entries [LO6] Learning Objective: 03-06 Demonstrate the purposes and recording of closing entries. Exercise 3-18 Record closing entries [LO6] Laker Incorporated's fiscal year-end is December 31, 2012. The following is an adjusted trial balance as of December 31. Accounts Debit Credit Cash $ 14,000 Supplies 39,000 Prepaid rent 25,000 Accounts payable $ 3,500 Notes payable 24,000 Common stock 41,000 Retained earnings 4,000 Dividends 4,000 11. aw ard: 3 out of 3 points Dividends 4,000 Service revenue 64,000 Salaries expense 21,500 Advertising expense 15,000 Rent expense 9,500 Utilities expense 8,500 Totals $136,500 $ 136,500 Required: Prepare the necessary closing entries. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31, 2012 Service revenue 64,000 Retained earnings 64,000 Retained earnings 54,500 Salaries expense 21,500 Advertising expense 15,000 Rent expense 9,500 Utilities expense 8,500 Retained earnings 4,000 Dividends 4,000 Exercise 3-19 Record closing entries and a post-closing trial balance [LO6, 7] [The following information applies to the questions displayed below.] The December 31, 2012, adjusted trial balance for Blue Hens Corporation is presented below. Accounts Debit Credit Cash $ 12,900 Accounts receivable 154,000 Prepaid rent 6,700 Supplies 26,300 Equipment 317,000 Accumulated depreciation $117,000 Accounts payable 9,100 Salaries payable 9,200 Interest payable 2,700 Notes payable (due in two years) 29,300 Common stock 170,000 Retained earnings 49,600 Service revenue 470,900 Salaries expense 295,000 Rent expense 13,900 Depreciation expense 28,700 Interest expense 3,300 Totals $857,800 $857,800 Section Break Exercise 3-19 Record closing entries and a postclosing trial balance [LO6, 7] Exercise 3-19 Part 1 Required: 1. Record the necessary closing entries at December 31, 2012. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Service revenue 470,900 12. aw ard: 3 out of 3 points Dec. 31 Service revenue 470,900 Retained earnings 470,900 Retained earnings 340,900 Salaries expense 295,000 Rent expense 13,900 Depreciation expense 28,700 Interest expense 3,300 Worksheet Learning Objective: 03-06 Demonstrate the purposes and recording of closing entries. Exercise 3-19 Part 1 Learning Objective: 03-07 Post closing entries and prepare a post-closing trial balance. Exercise 3-19 Part 1 Required: 1. Record the necessary closing entries at December 31, 2012. (Omit the "$" sign in your response.) Date General Journal Debit Credit Dec. 31 Service revenue 470,900 Retained earnings 470,900 Retained earnings 340,900 Salaries expense 295,000 Rent expense 13,900 Depreciation expense 28,700 Interest expense 3,300 [Show More]

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