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Need help finishing homework a and b I figured out but not c closing entries?

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Need help finishing homework a and b I figured out but not c closing entries?

Postby orlondo12 » Mon Jul 23, 2012 9:52 pm

markel Corporation’s balance sheet at December 31, 2011, is presented below.

cash $30,000 accounts payable $13,750
inventory 30,750 interest payable 2,500
prepaid insurance 5,600 bonds payable 50,000
equipment 38,000 common stock 25,000
--------------------------------------…
104,350 104,350




During 2012, the following transactions occurred.
1. Markel paid $2,500 interest on the bonds on January 1, 2012.
2. Markel purchased $241,100 of inventory on account.
3. Markel sold for $480,000 cash inventory which cost $265,000. Markel also collected $28,800 sales taxes.
4. Markel paid $230,000 on accounts payable.
5. Markel paid $2,500 interest on the bonds on July 1, 2012.
6. The prepaid insurance ($5,600) expired on July 31.
7. On August 1, Markel paid $10,200 for insurance coverage from August 1, 2012, through July 31, 2013.
8. Markel paid $17,000 sales taxes to the state.
9. Paid other operating expenses, $91,000.
10. Retired the bonds on December 31, 2012, by paying $48,000 plus $2,500 interest.
11. Issued $90,000 of 8% bonds on December 31, 2012, at 103. The bonds pay interest every June 30 and December 31.
Adjustment data:
1. Recorded the insurance expired from item 7.
2. The equipment was acquired on December 31, 2011, and will be depreciated on a straight-line basis over 5 years with a $3,000 salvage value.
3. The income tax rate is 30%.
Instructions
(You may want to set up T accounts to determine ending balances.)
(a) Prepare journal entries for the transactions listed above and adjusting entries. DONE
(b) Prepare an adjusted trial balance at December 31, 2012. DONE
(c) Prepare all necessary closing entries
orlondo12
 
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Joined: Tue Mar 22, 2011 8:00 pm

Need help finishing homework a and b I figured out but not c closing entries?

Postby chisulo » Mon Jul 23, 2012 10:11 pm

Sales D480,000
Gain on Bond Redemption d2,000
Income Summary Cr482,000
Closed Revenue

Income Summary D409,095
Cost of Goods Sold Cr265,000
Insurance Expense Cr9,850
Depreciation Expense Cr7,000
Operating Expense Cr91,000
Interest expense Cr5,000
Income Tax Expense Cr31,245
Closed Expenses

Income Summary D72,905
Retained Earnings Cr72,905
Closed Income Summary
chisulo
 
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Need help finishing homework a and b I figured out but not c closing entries?

Postby cash16 » Mon Jul 23, 2012 10:16 pm

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cash16
 
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