ANSWERS TO QUESTIONS

29. The post-closing trial balance contains only balance sheet accounts. Its purpose is to prove the equality of the permanent account balances that are carried forward into the next accounting period.

SOLUTIONS TO BRIEF EXERCISES
BRIEF EXERCISE 4-12

| | Account | | | | | | | | (a)(b)(c)(d)(e)(f)(g) | | Accumulated DepreciationDepreciation ExpenseRetained EarningsDividendsService RevenueSuppliesAccounts Payable | | Balance SheetIncome StatementRetained Earnings Statement and Balance SheetRetained Earnings StatementIncome StatementBalance SheetBalance Sheet |

BRIEF EXERCISE 4-14 (a) Closing Entries July 31 Green Fees Revenue 16,000 Income Summary 16,000 (To close revenue account) Income Summary 11,900 Salaries Expense 8,400 Maintenance Tax Expense 2,500 Income Tax Expense 1,000 (To close expense accounts) Income Summary 4,100 Retained Earnings 4,100 (To close net income to retained earnings) Retained Earnings 1,000 Dividends 1,000 (To close dividends to retained earnings)

(b) Retained Earnings | 1,000 | 20,000 | | 4,100 | | 7/31 Bal. 23,100 |

SOLUTIONS TO EXERCISES

EXERCISE 4-11

1. Oct. 31 Advertising Supplies Expense 2,000 Advertising Supplies ($2,500 – $500) 2,000 2. 31 Insurance Expense 100 Prepaid Insurance 100 3. 31 Depreciation Expense 50 Accumulated Depreciation— Office Equipment 50 4. 31 Unearned Service Revenue 800 Service Revenue 800 5. 31 Accounts Receivable 200 Service Revenue 200 6. 31 Interest Expense 70 Interest Payable 70 7. 31 Salaries Expense 1,400 Salaries Payable 1,400

SOLUTIONS TO PROBLEMS

PROBLEM 4-3A |

(a) 1. May 31 Insurance Expense 300 Prepaid Insurance 300 2. 31 Supplies Expense 1,550 Supplies ($2,600 – $1,050) 1,550 3. 31 Depreciation Expense—Lodge ($3,600 X 1/12) 300 Accumulated Depreciation— Lodge 300 31 Depreciation Expense—Furniture ($3,000 X 1/12) 250 Accumulated Depreciation— Furniture 250 4. 31 Interest Expense 210 Interest Payable [($36,000 X 7%) X 1/12] 210 5. 31 Unearned Rent Revenue 2,500 Rent Revenue 2,500 6. 31 Salaries Expense 750 Salaries Payable 750

(b)

Cash | 5/31 Bal. 2,500 | |

Prepaid Insurance | 5/31 Bal. 1,800 | 5/31 300 | 5/31 Bal. 1,500 | |

Supplies | 5/31 Bal. 2,600 | 5/31 1,550 | 5/31 Bal. 1,050 | |

Land | 5/31 Bal. 15,000 | |

PROBLEM 4-3A (Continued)

Lodge | 5/31 Bal. 70,000 | |

Accumulated Depreciation— Lodge | | 5/31 300 | | 5/31 Bal. 300 |

Furniture | 5/31 Bal. 16,800 | |

Accumulated Depreciation— Furniture | | 5/31 250 | | 5/31 Bal. 250 |

Accounts Payable | | 5/31 Bal. 4,700 |

Unearned Rent Revenue | 5/31 2,500 | 5/31 Bal. 3,300 | | 5/31 Bal. 800 |

Salaries Payable | | 5/31 750 | | 5/31 Bal. 750 |

Interest Payable | | 5/31 210 | | 5/31 Bal. 210 | Mortgage Payable | | 5/31 Bal. 36,000 |

Common Stock | | 5/31 Bal. 60,000 |

Rent Revenue | | 5/31 Bal. 9,000 5/31 2,500 | | 5/31 Bal. 11,500 |