The Ultra Services Company is a financial planning services firm owned and operated by Chad Tillman. As of July 31, 2008, the end of the current fiscal year, the accountant for The Ultra Services Company prepared an end-of-period spreadsheet (work sheet), part of which is shown at the top of the next page.
Instructions
1. Prepare an income statement, a statement of owner's equity (no additional investments were made during the year), and a balance sheet.
2. Journalize the entries that were required to close the accounts at July 31.
3. If the balance of Chad Tillman, Capital decreased $40,000 after the closing entries were posted, and the withdrawals remained the same, what was the amount of net income or net loss?
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The Ultra Services Company End-of-Period Spreadsheet (Work Sheet)
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For the Year Ended July 31, 2008
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Income Statement
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Balance Sheet
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Cash
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13,950
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Accounts Receivable
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41,880
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Supplies
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8,400
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Prepaid Insurance
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7,500
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Land
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180,000
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Buildings
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360,000
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Accumulated Depreciation-Buildings
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217,200
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Equipment
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258,270
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Accumulated Depreciation-Equipment
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122,700
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Accounts Payable
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33,300
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Salaries Payable
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3,300
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Unearned Rent
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1,500
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Chad Tillman, Capital
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340,500
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Chad Tillman, Drawing
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30,000
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Service Fees
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525,000
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Rent Revenue
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4,500
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Salary Expense
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219,000
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Depreciation Expense-Equipment
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28,500
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Rent Expense
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25,500
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Supplies Expense
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22,950
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Utilities Expense
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15,900
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Depreciation Expense-Buildings
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15,600
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Repairs Expense
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12,450
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Insurance Expense
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3,000
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Miscellaneous Expense
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5,100
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348,000
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529,500
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900,000
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718,500
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Net income
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181,500
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181,500
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529,500
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529,500
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900,000
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900,000
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