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Account Balances in 2003

Here are account balances as of December 31, 2003:

Cash - $12,000
Accounts Payable - $24,000
Accounts Receivable - $50,000
Salary Payable - $5,000
Trust Account - $40,000
Insurance - $1,000.00
Inventory - $10,000
Accumulated Depreciation - $4,200
Depreciation Exp - $4,800
Notes Payable - $5,000
Retained Earnings - $60,000
Supplies - $2,000
Prepaid Expense - $1,900
Supplies Expense - $1,000
Service Revenue - $8,000
Salary Expense - $26,000
Common Stock - $13,000

Questions:

1. For each of the balances above would the account normally be a credit or debit balance?

2. Enter the closing journal entries as of December 31st.

3. What would the new balances of each account be?

Solution Preview

1. For each of the balances above would the account normally be a credit or debit balance?
Cash - $12,000 - Debit
Accounts Payable - $24,000 Credit
Accounts Receivable - $50,000 Debit
Salary Payable - $5,000 Credit
Trust Account - $40,000 Credit
Insurance - $1,000.00 Debit
Inventory - $10,000 Debit
Accumulated Depreciation - $4,200 Credit
Depreciation Exp - ...

Solution Summary

Examination is made of account balances.

$2.19