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Financial Statements for Max Company

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Please see attached file.
Question #3

Max Company
Adjusted Trial Balance
7/31/2005
Debit Credit
Cash 100,000
Accounts Receivable 67,000
Supplies 3,000
Prepaid Insurance 5,000
Prepaid Rent 12,000
Inventory 125,000
Investment in IBM stock 23,000
Land 75,000
Building 70,000
Accumulated Depreciation, Building 34,000
Equipment 50,000
Accumulated Depreciation, Equipment 29,000
Accounts Payable 6,000
Salaries Payable 4,000
Interest Payable 2,000
Unearned Service Revenue 7,000
Note Payable 25,000
Mortgage Payable 96,000
Max, Capital 331,000
Max, Drawing 78,000
Sales 283,000
Sales Discounts 4,000
Cost of Goods Sold 122,000
Salaries Expense 42,000
Insurance Expense 10,000
Rent Expense 8,000
Interest Expense 9,000
Depreciation Expense 13,000
Supplies Expense 1,000 ________
817,000 817,000

Investment in IBM is considered to be long-term
The current portion of the mortgage payable is $14,000
The note payable matures on 9/15/05

Part A:
Prepare the Financial Statements for July 2005:
Income Statement
Statement of Owner's Equity
Balance Sheet

Part B:
Prepare the closing journal entries

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Solution Summary

The solution explains how to prepare the financial statements given the trial balance. It also has the closing entries

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