Chandler, Inc. is owned by Roscoe Chandler and provides appraisal services to individuals and companies wishing to purchase and sell fine art. Chandler, Inc. began business on January 1, 2017, and is just completing its first year of business. Roscoe asks for your help in completing the accounting cycle for the company by assisting with the closing process.

Before the closing entries are journalized, you begin with an adjusted trial balance. The closing entries are essentially the link from the adjusted trial balance to the post-closing trial balance.

Chandler, Inc.

ADJUSTED TRIAL BALANCE

December 31, 2017

	ACCOUNT TITLE	DEBIT	CREDIT
1	Cash	76,000.00
2	Accounts Receivable	29,000.00
3	Prepaid Insurance	16,000.00
4	Office Equipment	60,000.00
5	Accumulated Depreciation-Office Equipment		40,000.00
6	Accounts Payable		6,000.00
7	Salaries Payable		8,000.00
8	Income Taxes Payable		4,000.00
9	Common Stock		2,000.00
10	Retained Earnings		18,000.00
11	Dividends	5,000.00
12	Service revenue		175,600.00
13	Rent Revenue		92,000.00
14	Interest Revenue		17,200.00
15	Salaries Expense	71,000.00
16	Selling Expense	25,600.00
17	Income Taxes Expense	15,000.00
18	Insurance Expense	17,000.00
19	Depreciation Expense	47,200.00
20	Miscellaneous Expense	1,000.00
21	Totals	362,800.00	362,800.00

X

The Closing Process

The fina

X

Adjusted Trial Balance

Before the closing entries are journalized, you begin with an adjusted trial balance. The closing entries are essentially the link from the adjusted trial balance to the post-closing trial balance.

CHART OF ACCOUNTS
Chandler, Inc.
General Ledger
ASSETS 11 Cash 12 Accounts Receivable 15 Prepaid Insurance 18 Office Equipment 19 Accumulated Depreciation-Office Equipment LIABILITIES 21 Accounts Payable 23 Salaries Payable 24 Income Taxes Payable EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary	REVENUE 41 Service revenue 42 Rent Revenue 43 Interest Revenue EXPENSES 51 Salaries Expense 52 Selling Expense 53 Income Taxes Expense 55 Insurance Expense 56 Depreciation Expense 59 Miscellaneous Expense The final step of the accounting cycle is the closing process. The main goal of this stage of the cycle is to ensure that the balance of each temporary account is returned to zero and that net income is transferred to the retained earnings account. The first step in successfully undertaking the closing process is to understand the difference between a temporary account and a permanent account. Roscoe has some questions about the process. Answer the following questions (1) - (3). 1. If a temporary account has an ending balance of $57,000, what is its beginning balance for the following accounting period? 2. If a permanent account has an ending balance of $57,000, what is its beginning balance for the following accounting period?