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Question
Nancy ORode, doing business as ORode Consulting, performs consulting services for companies that create online learning games for children. On January 1, 2015, she started a sole proprietorship by placing $15,000 cash in a bank account opened for the business. Each month during the year, ORode withdrew $500 cash from the business for personal use. At December 31, 2015, after the last withdrawal, the Drawings account reflected a debit balance of $6,000. During the year, the usual journal entries for the year, including adjusting and closing entries for the revenue and expense accounts, resulted in total revenue of $60,000, total expenses of $12,000, and net income of $48,000. (For purposes of the related journal entry, use the accounts Consulting Revenue and Operating Expenses.)
Part a. Prepare the journal entry to record the initial capital contribution.
Part b. Prepare the journal entry to record one of the monthly withdrawals.
Part c. Prepare the journal entry to close the net income to the N. ORode, Capital account.
Part d. Prepare the journal entry to close the N. ORode, Drawings accounts at the end of the year.
Part e. Prepare a Statement of Owners Equity for the year ending December 31, 2015.
Answer
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Related questions
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Q:
Which of the following statements most appropriately describes the purpose of depreciating a long-lived tangible asset?
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Under the cost principle, a company capitalizes:
A) all ordinary repair expenditures incurred in the use of an asset.
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Q:
The following information was summarized from the adjusted trial balance of Reliance Yacht Repair, Inc. as of September 30, 2015, the end of the companys fiscal year. Accounts Payable
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6,000 Accumulated DepreciationEquipment
2,000 Cash
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2,500 Notes Receivable (short-term)
5,500 Prepaid Rent
500 Retained Earnings
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Part a. Prepare the closing entry for the company for the year ended September 30, 2015.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entry, and then determine the ending balance.
Part c. Prepare a post-closing trial balance at September 30, 2015.
Q:
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Required:
Part a. Prepare the closing entries dated December 31, 2016.
Part b. Draw a T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entries, and then determine the ending balance.