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    Sariah's Clip Shop, O'Malley Repair Shop

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    5. The Capital, Withdrawals, Income Summary accounts for Sariah's Clip Shop are shown in the T account form below. The closing entries have been recorded for the year ended Dec. 31, 20x4. Prepare a statement of owner's equity for Sariah's Clip Shop.

    Sariah Abdul, Capital

    12/31/x4 $4,500 12/31/x3 $13,000
    12/31/x4 9,500
    Balance 18,000
    Income Summary

    12/31/x4 21,500 12/31/x4 31,000
    12/31/x4 9,500
    Balance -------

    Sariah Abdul, Withdrawals

    4/1/x4 $1,500 12/31/x4 $4,500
    7/1/x4 1,500
    10/1/x4 1,500

    6. In the partial worksheet that follows, the Trial Balance and Income Statement columns have been completed. All amounts shown are in dollars. a) Show the adjustments that have been made in journal form. b) Prepare a balance Statement.
    Account name Trial Balance Income Statement
    Debit Credit Debit Credit
    Cash 14
    Acc. Receivable 24
    Supplies 22
    Prepaid insurance 16
    Building 50
    Accum. Depreciation, building 16
    Account payable 8
    Unearned revenues 4
    T.L., Capital 64
    Revenues 88 92
    Wages Expense 54 60
    Balance 180 180

    Insurance Expense 8
    Supplies Expense 16
    Depreciation Expense, Building 4

    Net income 88 92
    4
    92 92
    7. The items that appear below are the adjustments columns of a worksheet dated June 30,20xx.
    1) Prepare the adjusting entries in journal form.
    2) Where required, prepare appropriate reversing entries in journal form

    Account Name Adjustments
    Debit credit
    Prepaid insurance (a) 240
    Office supplies (b) 630
    Accumulated Depreciation, office supplies (c) 1,400
    Accumulated Depreciation, store equipment (d) 2,200
    Office salaries expense (e) 240
    Store salaries expense (e) 480
    Insurance expense (a) 240
    Office supplies Expense (b) 630
    Depreciation expense, office equipment (c) 1,400
    Depreciation expense, store equipment (d) 2,200
    Salaries payable (e) 720

    $ 5,190 $5, 190

    8. The items that follow are from the Income Statement columns of the worksheet for O'Malley Repair Shop for the year ended December 31, 20xx. Prepare entries in journal form to close the revenue, expense, Income Summary, and Withdrawals accounts. O'Malley withdrew $5,000 during the year.

    Account Name Income Statement
    Debit Credit

    Repair Revenue $ 25,620
    Wages Expense $ 8,110
    Rent Expense 1,200
    Supplies Expense 4,260
    Insurance Expense 915
    Depreciation Expense, Repair Equipment 1,345

    $ 15,830 $ 25, 620
    Net Income 9,790
    25,620 25, 620

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    https://brainmass.com/business/financial-statements/sariah-s-clip-shop-o-malley-repair-shop-87382

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    5. The Capital, Withdrawals, Income Summary accounts for Sariah's Clip Shop are shown in the T account form below. The closing entries have been recorded for the year ended Dec. 31, 20x4. Prepare a statement of owner's equity for Sariah's Clip Shop.

    Sariah Abdul, Capital

    12/31/x4 $4,500 12/31/x3 $13,000
    12/31/x4 9,500
    Balance 18,000
    Income Summary

    12/31/x4 21,500 12/31/x4 31,000
    12/31/x4 9,500
    Balance -------

    Sariah Abdul, Withdrawals

    4/1/x4 $1,500 12/31/x4 $4,500
    7/1/x4 1,500
    10/1/x4 1,500

    When closing entries, the balance of income summary will be transferred to Sariah Abdul, Capital. Therefore, the credit side of the income summary account will include the total revenue for the period while the debit side of the account will include the total expenses. The account balance will be the income or loss of the business for the period. For Sariah's Clip Shop, the credit side is greater than the debit side, therefore, the difference is the income for the period.

    For withdrawals, we can close to Sariah Abdul, Capital by crediting withdrawals account and debiting capital account.

    To prepare a statement of owners' equity, we can put the details into the statement as shown below.

    Sariah's Clip Shop
    Statement of Owner's Equity
    For the Year Ending December 31, 20x4

    Capital at January 1, 20x4 $13,000
    Add: Income for the year 20x4 $9,500
    Deduct: Withdrawals ($4,500)
    Capital at December 31, 20x4 $18,000

    6. In the partial worksheet that follows, the Trial Balance and Income Statement columns have been completed. All amounts shown are in dollars. a) Show the adjustments that have been made in journal form. b) Prepare a balance Statement.
    Account name Trial Balance Income Statement
    Debit Credit Debit Credit
    Cash 14
    Acc. Receivable 24
    Supplies 22
    Prepaid insurance 16
    Building 50
    Accum. Depreciation, building 16
    Account payable ...

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