¡Descarga Ejercicio de cierre de libro y más Ejercicios en PDF de Contabilidad Financiera solo en Docsity!
EXERCISE 11. LESSON 4. CLOSING THE BOOKS
The following financial information was taken from the accounting books of Taranto Corporation in euros. Account balances as of December 31, year 3 Accounts Type of Account Amount Accounts receivable 32, Accounts payable 30, Advertising expense 10, Cash 33, Notes receivable 88, Share capital 80, Interest expense 33, Equipment 70, Interest receivable 1, Interest revenue 11, Notes payable 40, Advances to employees 12, Rent expense 31, Reserves 57, Salaries expense 128, Salaries payable 47, Service revenue 186, Office Supplies 1, Supplies expense 10,
Work to do: a. Prepare the necessary closing entries at the end of year 3 for Taranto Corporation. b. What is the balance of the account “Profit or loss for the period” after closing the temporary accounts? c. Prepare the Income Statement for year 3 and the Balance Sheet as of December 31, year
- In the Income Statement, calculate the results from operating activities and the results for financial activities. In the Balance Sheet, calculate total assets, total liabilities and total equity (no other breakdown is needed).
SOLUTION
Closing entries:
Debits 1 Credits
186,000 Service revenue 11,200 Interest revenue Profit/loss for the period 197,
2
212,800 Profit/loss for the period Advertising expense 10, Debt interest expense 33, Rent expense 31, Salaries expense 128, Supplies expense 10,
3
80,000 Share capital Cash 33, 57,600 Reserves Acc. Receivable 32, 30,000 Acc. Payable Notes receivable 88, 40,000 Notes payable Equipment 70, 47,200 Salaries payable Interest receivable 1, Advances to employees 12, Office Supplies 1, Profit/loss for the period 15,
664,800 Total debits Total credits 664,
Profit / loss for the period balance: Debit balance = 212,800 – 197,200 = 15,600 (Net loss)
Income Statement and Balance Sheet:
Taranto Corporation Income Statement for the year 3
Taranto Corporation Balance Sheet as of December 31, year 3 Assets Net equity and liabilities Services rev. 186,000 Assets ................ 239,200 Net equity ........ 122, Advertising exp. (10,000) Equipment 70,000 Share capital 80, Rent expense (31,200) Office supplies 1,600 Reserves 57, Salaries exp. (128,000) Adv. to emp. 12,800 Loss period (15,600) Supplies exp. (10,000) Notes receiv. 88, Operat. result 6,800 Acc. Receivable 32,000 Liabilities .......... 117, Interest rev. 11,200 Interest receiv. 1,600 Acc. Payable 30, Debt int.exp. (33,600)^ Cash 33,200^ Notes payable 40, Financial result (22,400) Sal. payable 47,
Loss period ...... (15,600) Total Assets ....... 239,200 Total NE & L. ..... 239,
