Financial Statements and Closing EntriesThe Gorman Group is a financial planning services firm owned...

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Accounting

Financial Statements and Closing Entries
The Gorman Group is a financial planning services firm owned andoperated by Nicole Gorman. As of October 31, 2018, the end of thefiscal year, the accountant for The Gorman Group prepared anend-of-period spreadsheet, part of which follows:
The Gorman Group
End-of-Period Spreadsheet
For the Year Ended October 31, 2018
Adjusted Trial Balance
Account Title Dr. Cr.
Cash $11,000
Accounts Receivable 28,150
Supplies 6,350
Prepaid Insurance 9,500
Land 75,000
Buildings 250,000
Accumulated Depreciation-Buildings 117,200
Equipment 240,000
Accumulated Depreciation-Equipment 151,700
Accounts Payable 33,300
Salaries Payable 3,300
Unearned Rent 1,500
Common Stock 25,000
Retained Earnings 195,000
Dividends 20,000
Service Fees 468,000
Rent Revenue 5,000
Salaries Expense 291,000
Depreciation Expense-Equipment 17,500
Rent Expense 15,500
Supplies Expense 9,000
Utilities Expense 8,500
Depreciation Expense-Buildings 6,600
Repairs Expense 3,450
Insurance Expense 3,000
Miscellaneous Expense 5,450
1,000,000 1,000,000
Required:
1. Prepare an income statement.
The Gorman Group
Income Statement
For the Year Ended October 31, 2018
Revenues:
Total revenues
Expenses:
Total expenses $
$
Prepare a retained earnings statement.
The Gorman Group
Retained Earnings Statement
For the Year Ended October 31, 2018
$
Prepare a balance sheet.
The Gorman Group
Balance Sheet
October 31, 2018
Assets Liabilities
Current assets: Current liabilities:
Total liabilities
Total current assets
Property, plant, and equipment: Stockholders' Equity
Total property, plant, andequipment Total stockholders' equity
Total assets Total liabilities and stockholders' equity
2. Journalize the entries that were required toclose the accounts at October 31. For a compound transaction, if anamount box does not require an entry, leave it blank.
Date Account Debit Credit
Oct. 31 Close revenues
Oct. 31 Close expenses
Oct. 31 Close income/loss
Oct. 31 Close dividends
3. If the balance of Retained Earnings hadinstead increased $115,000 after the closing entries were posted,and the dividends remained the same, what would have been theamount of net income or net loss? Enter all amounts as positivenumbers.
$

Answer & Explanation Solved by verified expert

3.7 Ratings (367 Votes)

Income Statement revenues Service fees 468000 Rent revenue 5000 Total revenue 473000 Expenses Salaries expense 291000 Depreciation 17500 Rent expense 15500 Supplies 9000 Utilities expense 8500 DepreciationBuilding 6600 Repairs expenses 3450 Insurance expenses 3000 Misc expenses 5450 Total expenses 360000 Net income 113000 See Answer

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In: AccountingFinancial Statements and Closing EntriesThe Gorman Group is a financial planning services firm owned and...Financial Statements and Closing EntriesThe Gorman Group is a financial planning services firm owned andoperated by Nicole Gorman. As of October 31, 2018, the end of thefiscal year, the accountant for The Gorman Group prepared anend-of-period spreadsheet, part of which follows:The Gorman GroupEnd-of-Period SpreadsheetFor the Year Ended October 31, 2018Adjusted Trial BalanceAccount TitleDr.Cr.Cash$11,000Accounts Receivable28,150Supplies6,350Prepaid Insurance9,500Land75,000Buildings250,000Accumulated Depreciation-Buildings117,200Equipment240,000Accumulated Depreciation-Equipment151,700Accounts Payable33,300Salaries Payable3,300Unearned Rent1,500Common Stock25,000Retained Earnings195,000Dividends20,000Service Fees468,000Rent Revenue5,000Salaries Expense291,000Depreciation Expense-Equipment17,500Rent Expense15,500Supplies Expense9,000Utilities Expense8,500Depreciation Expense-Buildings6,600Repairs Expense3,450Insurance Expense3,000Miscellaneous Expense5,4501,000,0001,000,000Required:1. Prepare an income statement.The Gorman GroupIncome StatementFor the Year Ended October 31, 2018Revenues:Total revenuesExpenses:Total expenses$$Prepare a retained earnings statement.The Gorman GroupRetained Earnings StatementFor the Year Ended October 31, 2018$Prepare a balance sheet.The Gorman GroupBalance SheetOctober 31, 2018AssetsLiabilitiesCurrent assets:Current liabilities:Total liabilitiesTotal current assetsProperty, plant, and equipment:Stockholders' EquityTotal property, plant, andequipmentTotal stockholders' equityTotal assetsTotal liabilities and stockholders' equity2. Journalize the entries that were required toclose the accounts at October 31. For a compound transaction, if anamount box does not require an entry, leave it blank.DateAccountDebitCreditOct. 31 Close revenuesOct. 31 Close expensesOct. 31 Close income/lossOct. 31 Close dividends3. If the balance of Retained Earnings hadinstead increased $115,000 after the closing entries were posted,and the dividends remained the same, what would have been theamount of net income or net loss? Enter all amounts as positivenumbers.$

The Gorman Group End-of-Period Spreadsheet For the Year Ended October 31, 2018
	Adjusted Trial Balance
Account Title	Dr.	Cr.
Cash	$11,000
Accounts Receivable	28,150
Supplies	6,350
Prepaid Insurance	9,500
Land	75,000
Buildings	250,000
Accumulated Depreciation-Buildings		117,200
Equipment	240,000
Accumulated Depreciation-Equipment		151,700
Accounts Payable		33,300
Salaries Payable		3,300
Unearned Rent		1,500
Common Stock		25,000
Retained Earnings		195,000
Dividends	20,000
Service Fees		468,000
Rent Revenue		5,000
Salaries Expense	291,000
Depreciation Expense-Equipment	17,500
Rent Expense	15,500
Supplies Expense	9,000
Utilities Expense	8,500
Depreciation Expense-Buildings	6,600
Repairs Expense	3,450
Insurance Expense	3,000
Miscellaneous Expense	5,450
	1,000,000	1,000,000

The Gorman Group Balance Sheet October 31, 2018
Assets				Liabilities
Current assets:				Current liabilities:



				Total liabilities
Total current assets
Property, plant, and equipment:				Stockholders' Equity







Total property, plant, andequipment				Total stockholders' equity
Total assets				Total liabilities and stockholders' equity

Date	Account	Debit	Credit
Oct. 31 Close revenues



Oct. 31 Close expenses










Oct. 31 Close income/loss


Oct. 31 Close dividends