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The following accounts and balances were drawn from the records of Shearer Company at December 31, 2016:

Cash$22,100Accounts receivable$21,000Land43,000Cash flow from operating act.8,600Insurance expense2,500Beginning retained earnings47,200Dividends5,000Beginning common stock5,500Prepaid insurance3,500Service revenue86,000Accounts payable15,000Cash flow from financing act.9,000Supplies2,100Ending common stock14,500Supplies expense1,000Cash flow from investing act.(6,000)Rent expense3,500Other operating expenses59,000\begin{array}{lrlr} \text{Cash}&\$22,100 & \text{Accounts receivable} & \$21,000\\ \text{Land}&\text{43,000} & \text{Cash flow from operating act.} & \text{8,600}\\ \text{Insurance expense}&\text{2,500} & \text{Beginning retained earnings} & \text{47,200}\\ \text{Dividends}&\text{5,000} & \text{Beginning common stock} & \text{5,500}\\ \text{Prepaid insurance}&\text{3,500} & \text{Service revenue} & \text{86,000}\\ \text{Accounts payable}&\text{15,000} & \text{Cash flow from financing act.} & \text{9,000}\\ \text{Supplies}&\text{2,100} & \text{Ending common stock} & \text{14,500}\\ \text{Supplies expense}&\text{1,000} & \text{Cash flow from investing act.} & \text{(6,000)}\\ \text{Rent expense}&\text{3,500} & \text{Other operating expenses} & \text{59,000}\\ \end{array}


Use the accounts and balances from Shearer Company to construct an income statement, statement of changes in stockholders' equity, balance sheet, and statement of cash flows (show only totals for each activity on the statement of cash flows).

Assuming the following Adjusted Trial Balance, create the Post-Closing Trial Balance that would result, after all closing journal entries were made and posted:

Adjusted Trial Balance\begin{array}{c} \textbf{Adjusted Trial Balance} \end{array}

DebitCreditCash$22,900Prepaid Insurance4,000Fixed Assets44,000Notes Payable$40,000Common Stock25,000Retained Earnings48,350Dividends22,000Sales Revenue150,000Automobile Expense26,500Insurance Expense20,000Salaries Expense122,500Supplies Expense1,450$263,350$263,350\begin{array}{lcc} &\textbf{Debit}&\textbf{Credit}\\[5pt] \text{Cash}&\text{\$\hspace{5pt}22,900}\\ \text{Prepaid Insurance}&\text{\hspace{15pt}4,000}\\ \text{Fixed Assets}&\text{\hspace{10pt}44,000}\\ \text{Notes Payable}&&\text{\$\hspace{5pt}40,000}\\ \text{Common Stock}&&\text{\hspace{10pt}25,000}\\ \text{Retained Earnings}&&\text{\hspace{10pt}48,350}\\ \text{Dividends}&\text{\hspace{10pt}22,000}\\ \text{Sales Revenue}&&\text{\hspace{5pt}150,000}\\ \text{Automobile Expense}&\text{\hspace{10pt}26,500}\\ \text{Insurance Expense}&\text{\hspace{10pt}20,000}\\ \text{Salaries Expense}&\text{\hspace{5pt}122,500}\\ \text{Supplies Expense}&\underline{\text{\hspace{15pt}1,450}}&\underline{\text{\hspace{39pt}}}\\ &\underline{\underline{\text{\$\hspace{1pt}263,350}}}&\underline{\underline{\text{\$\hspace{1pt}263,350}}}\\ \end{array}


The unadjusted trial balance for All Mopped Up Company, a cleaning service, is as follows:

ALL MOPPED UP COMPANYUnadjusted Trial BalanceDecember 31, 2018\begin{array}{c} \textbf{ALL MOPPED UP COMPANY}\\ \textbf{Unadjusted Trial Balance}\\ \textbf{December 31, 2018} \end{array}

Account TitleDebitCreditCash$800Office Supplies2,000Prepaid Insurance600Equipment30,000Accumulated Depreciation- Equipment$2,000Accounts Payable2,400Salaries PayableUnearned Revenue700Common Stock15,300Dividends5,000Service Revenue25,000Salaries Expense7,000Supplies ExpenseDepreciation Expense- EquipmentInsurance ExpenseTotal$45,400$45,400\begin{array}{lrr} {\textbf{Account Title}}&\textbf{Debit\hspace{6pt}}&\textbf{Credit\hspace{4pt}}\\ \text{Cash}&\text{\$\hspace{18pt}800}\\ \text{Office Supplies}&\text{2,000}\\ \text{Prepaid Insurance}&\text{600}\\ \text{Equipment}&\text{30,000}\\ \text{Accumulated Depreciation- Equipment}&&\text{\$\hspace{10pt}2,000}\\ \text{Accounts Payable}&&\text{2,400}\\ \text{Salaries Payable}\\ \text{Unearned Revenue}&&\text{700}\\ \text{Common Stock}&&\text{15,300}\\ \text{Dividends}&\text{5,000}\\ \text{Service Revenue}&&\text{25,000}\\ \text{Salaries Expense}&\text{7,000}\\ \text{Supplies Expense}\\ \text{Depreciation Expense- Equipment}\\ \text{Insurance Expense}&\text{\underline{\hspace{38pt}}}&\text{\underline{\hspace{38pt}}}\\ \text{Total}&\underline{\underline{\$\hspace{5pt}\text{45,400}}}&\underline{\underline{\$\hspace{5pt}\text{45,400}}}\\ \end{array}

During the 12 months ended December 31, 2018, All Mopped Up:

  • a. used office supplies of $1,700.
  • b. used prepaid insurance of$580.
  • c . depreciated equipment, $500.
  • d. accrued salaries expense of$310 that hasn't been paid yet.
  • e. earned $400 of unearned revenue.


  1. Open a T-account for each account using the unadjusted balances.
  2. Journalize the adjusting entries using the letter and December 31 date in the date column.
  3. Post the adjustments to the T-accounts, entering each adjustment by letter. Show each account's adjusted balance.


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