The balance sheet of Taos Promotion includes the amounts shown below. Analysis of the company's records reveals the following transactions during 2017, the company's first year of operations:
Cash received from customers, recorded as service revenue $311,475
Purchase of supplies for cash, expensed $ 43,500
Cash paid for salaries, expensed $ 28,100
Analysis of the company's balance sheet accounts reveals that at year-end, supplies on hand total $7,950, employees have earned $12,000 but have not yet been paid, and on the last day of the fiscal year, customers paid deposits of $22,050 for future promotions (this is included in total cash received from customers, above).
Required: Prepare journal entries to adjust the account balances for revenue, supplies expense and salary expense for the year-end. Prepare closing entries.

Question

The balance sheet of Taos Promotion includes the amounts shown below. Analysis of the company's records reveals the following transactions during 2017, the company's first year of operations: 
Cash received from customers, recorded as service revenue $311,475
Purchase of supplies for cash, expensed $ 43,500
Cash paid for salaries, expensed $ 28,100
Analysis of the company's balance sheet accounts reveals that at year-end, supplies on hand total $7,950, employees have earned $12,000 but have not yet been paid, and on the last day of the fiscal year, customers paid deposits of $22,050 for future promotions (this is included in total cash received from customers, above).
Required: Prepare journal entries to adjust the account balances for revenue, supplies expense and salary expense for the year-end. Prepare closing entries.

Quizplus · Accepted Answer

The Answer of The balance sheet of Taos Promotion includes the amounts shown below. Analysis of the company's records reveals the following transactions during 2017, the company's first year of operations: 
Cash received from customers, recorded as service revenue $311,475
Purchase of supplies for cash, expensed $ 43,500
Cash paid for salaries, expensed $ 28,100
Analysis of the company's balance sheet accounts reveals that at year-end, supplies on hand total $7,950, employees have earned $12,000 but have not yet been paid, and on the last day of the fiscal year, customers paid deposits of $22,050 for future promotions (this is included in total cash received from customers, above).
Required: Prepare journal entries to adjust the account balances for revenue, supplies expense and salary expense for the year-end. Prepare closing entries.

The Balance Sheet of Taos Promotion Includes the Amounts Shown