financeBrushstroke Art Studio, Inc., provides quality instruction to aspiring artists. The business adjusts its accounts monthly, but performs closing entries annually on December 31 . This is the studio's unadjusted trial balance dated December 31, 2011.
$$
\begin{array}{|cc}
\hspace{3cm} & \text{BRUSHSTROKE ART STUDIO, INC.
UNADJUSTED TRIAL BALANCE}\\
\hspace{3cm} & \text{DECEMBER 31, 2011}\\
\hspace{4cm} &\hspace{2cm} & \textbf{Debit} & \textbf{Credit}\\
\text { Cash } & \cdots \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots \cdots\cdots\cdots\cdots& \$ 22,380 & \\
\text { Client fees receivable} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 71,250& \\
\text { Supplies } & \cdots \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots \cdots\cdots\cdots\cdots& 6,000 & \\
\text {Prepaid Studio rent } &\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 2,500 & \\
\text {Studio equipment } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 96,000& \\
\text { Accumulated depreciation: studio equipment } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & & \$52,000 \\
\text { Accounts payable} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & & 6,420 \\
\text { Notes payable } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots& & 24,000\\
\text { Interest payable } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots \cdots\cdots\cdots& &480 \\
\text {Unearned client fees } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & & 8,000\\
\text { Income tax payable } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots \cdots\cdots\cdots& &5,000 \\
\text { Capital stock } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & & 50,000 \\
\text {Retained earnings } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & & 20,000\\
\text {Client fees earned } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & & 82,310\\
\text {Supplies expense } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 4,000& \\
\text { Salaries expense} & \cdots\cdots\cdots\cdots\cdots\cdots \cdots\cdots\cdots& 17,250& \\
\text {Interest expense } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 480 & \\
\text {Studio rent expense } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots \cdots\cdots\cdots&11,250 & \\
\text {Utilities expense } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 3,300&\\
\text {Depreciation expense: studio equipment } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots &8,800 & \\
\text {Income taxes expense } & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 5,000& \\
\text{Totals} &\cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & \$248,210 & \$248,210\\
\end{array}
$$
Other Data
1. Supplies on hand at December 31,2011 , total $\$ 1,000$.
2. The studio pays rent quarterly (every three months). The last payment was made November 1 , 2011. The next payment will be made early in February 2012.
3. Studio equipment is being depreciated over 120 months ( 10 years).
4. On October 1, 2011, the studio borrowed $\$ 24,000$ by signing a 12 -month, 12 percent note payable. The entire amount, plus interest, is due on September 30, 2012.
5. At December $31,2011, \$ 3,000$ of previously unearned client fees had been earned.
6. Accrued, but unrecorded and uncollected client fees earned total $\$ 690$ at December 31, 2011.
7. Accrued, but unrecorded and unpaid salary expense totals $\$ 750$ at December 31,2011 .
8. Accrued income taxes expense for the entire year ending December 31,2011 , total $\$ 7,000$. The full amount is due early in 2012.
Instructions\
c. Prepare the necessary year-end closing entries. financeFill in the missing amounts in the following schedules.
$$
\begin{array}{lccc}
& \textbf { April } & \textbf{ May } & \textbf{ June } \\
\text{ 1. Sales * } & \underline{ \$ 80,000 } & \underline{ \$ 60,000 } & \underline{ \$ \text{?} } \\
\quad \text{ Cash receipts: } \\
\quad \quad \text{ From cash sales } & \$ \text{?} & \$ \text{?} & \$ 45,000 \\
\quad \quad \text{ From sales on account } & \underline{ \$ \text{?}} & \underline{ 34,000 } & \underline{ \$ \text{?}} \\
\quad \quad \text{ Total cash receipts } & \underline{ \underline{ \$ \text{?} }} & \underline{ \underline{ \$ \text{?} }} & \underline{ \underline{ \$ \text{?} }}
\end{array}
$$
$$
\begin{array}{lc}
\text{ 2. Accounts payable, 12/31/x0 } & 300,000 euros \\
\quad \text{ Purchase of goods and services on account during 20/1 } & 1,200,000 \\
\quad \text{ Payments of accounts payable during 20x1 } & ? \\
\quad \text{ Accounts payable, 12/31/x1 } & 400,000 \\
\text{ 3. Accounts receivable, 12/31/x0 } & 340,000 yen { }^{\ddagger} \\
\quad \text{ Sales on account during 20/1 } & 900,000 \\
\quad \text{ Collections of accounts receivable during 20/1 } & 780,000 \\
\quad \text{ Accounts receivable, 12/31/x1 } & ? \\
\text{ 4. Accumulated depreciation, 12/31/x0 } & \$ 810,000 \\
\quad \text{ Depreciation expense during 20/1 } & 150,000 \\
\quad \text{ Accumulated depreciation, 12/31/x1 } & ? \\
\text{ 5. Retained earnings, 12/31/x0 } & \$ 2,050,000 \\
\quad \text{ Net income for 20x1 } & 400,000 \\
\quad \text{ Dividends paid in 20x1 } & -0- \\
\quad \text{ Retained earnings, 12/31/x1 } & ?
\end{array}
$$
*Half of each month's sales are on account. March sales amounted to $\$ 60,000$.
${\dagger}$ $+60 \%$ of credit sales is collected in the month of sale; $40 \%$ is collected in the following month.
${ }^{\ddagger}$Yen is the Japanese national currency.