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Mastery Problem: The Accounting Cycle Chandler, Inc. 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 dosing process Adjusted Trial Balance Before the dosing entries are journalized, you begin with an adjusted trial balance. The dlosing entries are essentially the link from the adjusted trial balance to the post-dosing trial balance. Chandler, Inc. Adjusted Trial Balance December 31, 2017 Account Title Debit Balances Credit Balances Cash 73,000 Accounts Recelvable 29,000 Prepaid Insurance 16,000 Office Equipment 60,000 Accumulated Depredation-Office Equipment Accounts Payable Salaries Payable Income Taxes Payable 40,000 6,000 8,000 4,000 Common Stock 2,000 Retained Eamings Dividends 11,000 5,000 Fees Earned 185,600 Rent Revenue 92,000 Apps Make up Chp 4 Hmwk Calculator Print Item Interest Revenue 17,200 Salaries Expense Selling Expense 71,000 31,600 Income Taxes Expense 15,000 Insurance Expense 17,000 Depredation Expense Miscellaneous Expense 47,200 1,000 365,800 365,800 The Closing Process The final step of the accounting cycle is the closing process. The main goal of this stage of the cyde 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 successfuly undertaking the closing process is to understand the difference between a temporary account and a permanent acceunt. Roscoe has some questions about the process. Answer the following questions (1)-(3). If an amount is zero, enter "0" 1. If a temporary account has an ending balance of s67,000, what is its beginning balance for the following accounting period 2. If a permanent account has an ending balance of $67,000, what is its beginning balance for the following aceounting period? 3. Roscoe will be preparing his yearly financial statements after completing Chandler, Inc.'s closing process, and is somewhat confused about the characteristics of the accounts. He has started by creating the following chart, and asks for your help in completing it. (Select "Yes" or "No" from the below dropdowns.) Temporary Account Closed to Permanent Retained Earninas Account Phint Item 3. Roscoe will be preparing his yearly financial statements after completing Chandler, Inc.'s dosing process, and is somewhat confused about the characte creating the following chart, and asks for your help in completing it. (Select "Yes" or "No" from the below dropdowns.) mporary Permanent Closed to Account Account Retained Earnings Revenues Asset accounts Expenses Liability accounts Dividends account Roscoe's Journal Roscoe has attempted to journalize the dosing entries for Chandler, Inc. on this panel. He's not sure if he's journalized the entries correctly, and asks you to correct, but the other is incorrect. Determine which entry is incorrect, and journalize both closing entries for Chandler, Inc. as of Dec. 31. Journal age 25 Date Description Debit Post. Ref. Credit Retained Earnings Dec. 31 477,600 Fees Earned 185,600 Rent Revenue 92,000 Interest Revenue 17,200 Roscoe has attempted to journalize the dosing entries for Chandler, Inc. on this panel. He's not sure if he's journalized the entries correctly, and asks you to review them. You find that one entry is correct, but the other is incorrect. Determine which entry is incorrect, and journalize both closing entries for Chandler, Inc. as of Dec. 31. Journal Page 25 Date Description Debit Post. Ref, Credit Dec. 31 Retained Earnings 477,600 Fees Earned 185,600 Rent Revenue 92,000 Interest Revenue 17,200 Salaries Expense 71,000 Selling Expense 31,600 Income Taxes Expense 15,000 Depreciation Expense 47,200 Insurance Expense 17,000 Miscellaneous Expense 1,000 Retained Earnings Dec. 31 5,000 Dividends 5,000 Journal ke up Chp 4 Hmwk Calculator Print Item Journal Roscoe has attempted to journalize the dlosing entries for Chandler, Inc. on the Roscoe's Journal panel. He's not sure if he's journalized the entries correctly, and asks you to review them. You find that one entry is correct, but the other is incorrect. Determine which entry is incorrect, and journalize both closing entries for Chandler, Inc. as of Dec. 31. If an amount box does not require an entry, leave it blank. Dec. 31 Dec. 31 Post-Closing Trial Balance eucle Aleo the eaet he nostddeciendhalanen.chnmn.al.ahn.nomannt IT ake up Chp 4 Hmwk Calculator Print Item Post-Closing Trial Balance The post-dosing trial balance shows all the permanent accounts with their updated values after the temporary accounts have been reduced to zero balance for the next accounting cydle. Also, the p dosing trial balance is meant to ensure that debits equal credits post-dlose. Roscoe is very happy with your work on the closing entries for Chandler, Inc., and asks if you would prepare a post dlosing trial balance for the company, If an amount box does not require an entr leave it blank Chandler, Inc. Post Closing Trial Balance December 31, 2017 Account Title Debit Balances Credit Balances Cash Accounts Receivable Prepaid Insurance Office Equipment Accumulated Deprediation-Office Equipment Accounts Payable Salaries Payable Income Taxes Payable Common Stock Retained Earmings ke up Chp 4 Hmwk Calculator Print Item Debit Balances Credit Balanc Account Title Cash 73,000 Accounts Receivable 29,000 Prepaid Insurance 16,000 Office Equipment 60,000 Accumulated Depreciation-Office Equipment 40,00 Accounts Payable 6,000 Salaries Payable 8,000 Income Taxes Payable 4,000 Common Stock 2,000 Retained Earnings 11,000 Dividends 5,000 Fees Earned 185,600 Rent Revenue 92,000 Interest Revenue 17,200 Salaries Expense 71,000 Selling Expense Income Taxes Expense 31,600 15.000 Insurance Expense Depreciation Expense Miscellaneous Expense 17.000 47,200 1,000 365 800 365,800 The Closing Process The final step of the accounting cvceis the clos ordcess The main goal of this stape Type here to search eClosmg Process e final step of the accounting cycle is the closing process. The main goal of this ansferred to the retained earnings account. The first step in successfully underta as some questions about the process. nswer the following questions (1)- (3). If an amount is zero, enter "O" 1. If a temporary account has an ending balance of $67,000, what is its beginning b 2. If a permanent account has an ending balance of $67,000, what is its beginning ba 3. Roscoe will be preparing his yearly financial statements after completing'Chandler, In creating the following chart, and asks for your help in completing it. (Select "Yes" or "N Temporary Closed to Permanent Retained Earnings Account Account Revenues Asset accounts Expenses Liability accounts Dividends account Roscoe's Journal OType here to search mwk Print Item Calculator cH entry is mCorrect, and jourmanzerOL Closing enthes TorChandier, IC. as Page 25 Journal Credit Debit Post. Ref. Description Retained Earnings 477,600 185,600 Fees Earned 92,000 Rent Revenue 17,200 Interest Revenue Salaries Expense 71,000 Selling Expense 31,600 Income Taxes Expense 15,000 Depreciation Expense 47,200 Insurance Expense 17,000 Miscellaneous Expense 1,000 Retained Earnings 31 5.000 Dividends 5.000 nal coe has attempted to fournallze the cosing entcesfO chande ns on the Roscoes v ma bar entry is corcect but the otrerisinconact SIORDec Type here to search Print Calculator up Chp 4 Hmwk ournal Roscoe has attempted to journalize the closing entries for Chandler, Inc. one entry is correct, but the other is incorrect. Determine which entry is incorrect, and journalize both closing entries for Dec. 31 Dec. 31 Post-Closing Trial Balance The post-osino tria baance shoeateermaner eiud Type here to search losing Trial Balance ost-dosing trial balance shows all the permanent accounts with their updated value g trial balance is meant to ensure that debits equal credits post-close. be is very happy with your work on the closing entries for Chandler, Inc., and asks it e it blank. Chandler, Inc. Post-Closing Trial Balance December 31, 2017 Credit Balances Account Title Debit Balances ash ccounts Receivable Prepaid Insurance Office Equipment Accumulated Depreciation-Office Equipment Accounts Payable Salaries Payable Income Taxes Payable Common Stock Retained Eamings Type here to search O