Based on the answers you obtained in P15- 4, prepare the closing entry.
In p15- 4
From the ledger accounts prepared for P15- 3, prepare a trial balance. Extend the trial balance to an eight column work sheet like that shown in Table 15- 16 , and use the work sheet to prepare the following financial statements:
(a) Income statement,
(b) Statement of changes in owner equity, and
(c) Balance sheet.
In P15- 3,
Using the information given in P15- 1 and P15- 2, record the transactions in general journal form. Then, post the journal entries to ledger T accounts, like those shown in Table 15 - 11. (To help keep track of your postings, give each journal entry the same reference number or letter shown in the problems, and insert that number or letter to the left of the amount recorded in the T- accounts.)
In P15- 1
Sally Golfo, a registered nurse, opens a business called Sally Elder Care. Golfo plans to care for the elderly herself in a facility that she will rent. The following transactions occurred during July 2013, her first month in business. Analyze these transactions on a work sheet similar to that illustrated in the text. You will need columns for Cash, Accounts receivable, Prepaid rent, Furniture, Notes pay-able, Accounts payable, and Sally Golfo, Capital.
1 Ms. Golfo invested $ 5,000 of her own money to start the business.
1 She borrowed $ 20,000 from the bank to provide her with additional cash. She agreed to repay the bank $ 1,000 on the last day of every month, starting July 31, with interest at the rate of 6 percent a year on the unpaid balance.
1 She rented the house next to hers for a 3 month period, paying a total of $ 6,000, to provide a facility to care for her patients.
1 She purchased furniture for the facility. She received an invoice for $ 4,800, payable in 10 days.
10 She paid the $ 4,800 invoice for the furniture.
18 She paid her assistant $ 800 for 2 weeks work.
20 During the month, she billed her clients $ 12,000 for services rendered.
25 She received $ 9,000 in cash from the clients who were previously billed.
30 At month end, she received a bill for electric service in the amount of $ 300. She will pay the bill in August.
30 During the month, she paid $ 500 for food to provide lunch to her clients.
31 She paid the bank $ 1,100 on the borrowing. Of that amount, $ 1,000 was for the principal payment on the loan, and $ 100 was for interest.
In P15- 2
1. Adjust for the expiration of 1 month rent.
2. Adjust for the using up of the furniture during the month. (Assume the furniture will have a useful life of 4 years.)
3. Accrue for $ 800 of salary earned by the assistant during the last 2 weeks of the month but not yet paid to her.