Emma Enterprises has asked for your assistance in preparing their financial statements. Emma has provided you with the following list of accounts and their account balances. Emma advises you that all accounts have a normal balance and that the balance of the Retained Eanings account reflects the net profit that has been retained in the business. Debit Credit Accounts Payable Accounts Receivable 1,200 12,000 12,000 10,000 3,600 50,000 28,000 13,000 55,000 36,000 3,600 10,000 800 240 6,000 5,000 100 840 25,000 8,000 2,000 20,000 40,000 15,000 1,500 20,000 400 1,300 4,500 iation Delivery Van Advertisin Bad Debts Ex Bank Loan Cash Contributed Capital Cost of Goods Sold Delivery Van Dividends Electricity Pa Insurance Ex Interest Interest Interest Receivable Inv Rent Rent Ex Retained Earnin Salaries Ex Salaries Payable Sales Revenue lies Ex Unearned Revenue Required: A. Identify the normal balance of each account by transferring the dollar amount into the correct debit or credit column. B. Prepare the following financial statements: a. b. c. Income Statement Statement of Changes in Equity (Retained Earnings) Balance sheet C. Record the closing entries in a general journal using only the ledger accounts given.

Step-by-step explanation:

Accounts Payable  $ 1,200 (credit)

Accounts Receivable$ 12,000  (debit)

Accumulated Depreciation-Delivery Van$ 12,000(credit)

Advertising Expense$ 10,000(debit)  

Bad debt expense$ 3,600  (debit)

Bank Loan$ 50,000  (credit)

Cash$ 28,000  (debit)  

Contributed capital$ 13,000  (credit)

Cost of goods sold$ 55,000  (debit)  

Delivery van  $36,000  (debit)  

Depreciation Expense $3,600  (debit)  

Dividends$10,000  (debit)

Electricity Expense$ 800  (debit)  

Electricity Payable $ 240  (credit)

Insurance Expense$6,000  (debit)  

Interest Expense$5,000  (debit)  

Interest Payable$ 100(credit)

Interest Receivable$840  (debit)  

Inventory$25,000  (debit)  

Prepaid Insurance$8,000  (debit)

Prepaid Rent$2,000  (debit)

Rent Expense$20,000  (debit)  

Retained Earning$40,000  (credit)

Salaries Expense$15,000  (debit)  

Salaries Payable$1,500  (credit)

Sales Revenue$120,000(credit)

Supplies$400  (debit)

Supplies Expense$1,300  (debit)  

Unearned Revenue$ 4,500(credit)

B)

Sales Revenue  $120,000  

Cost of goods sold  $55,000  

Gross profit  120,000-55,000 = $65,000

Operating expenses    

Advertising expense$10,000  

Bad debt expense$3,600  

Depreciation Expense$3,600  

Electricity Expense$800  

Insurance Expense$6,000  

Rent Expense$20,000  

Salaries Expense$15,000  

Supplies Expense$1,300  

Total operating expense  $60,300  

Operating income$4,700[65,000-60,300]

Other revenue and expenses:    

Interest expense$(5,000)    

Net income  $                        (300)

Statement of Change in retained earning    

Retained Earning-as on April 1$40,000  

Add: Net Income$(300)  

Less: Dividend$(10,000)  

Retained Earning-as on March 31   $29,700(40000-300-10000)

Balance Sheet    

Assets    

Current Assets:    

Cash$28,000  

Account receivable$ 12,000  

Interest Receivable$840  

Inventory$25,000  

Prepaid Insurance$8,000  

Prepaid Rent$2,000  

Supplies on hand$400  

Total Current Assets$6,240  

Non current asset:    

Delivery Van$36,000  

Less: Accumulated Depreciation$ (12,000)  

Total Non Current Asset$24,000  

Total Asset$ 100,240(76240+24000)

Liabilities and Stock holder's Equity    

Current Liabilities:  

Salaries payable$ 1,500  

Electricity Payable$ 240  

Accounts payable$ 1,200  

Interest payable$ 100  

Unearned Revenue$ 4,500  

Total current liability$ 7,540  

Non current liability:    

Bank Loan$50,000  

Total Liabilities$57,540  

Stockholder's equity    

Capital Stock:    

Contributed capital$ 13,000  

Retained earning$ 29,700  

Total Shareholder's Equity$ 42,700(13000+29700)  

Total liability and shareholder's equity$ 100,240(57540+42700)

Closing entries:

Transfer Sales revenue to retained earning:    

Dr Sales Revenue$ 120,000  

   Cr Retained Earning  $ 120,000  

To transfer all expense to retained earning:  

Dr Retained Earning$120,300  

    Cr Cost of goods sold  $ 55,000  

    Cr Advertising expense  $10,000  

    Cr Bad debt expense  $3,600  

    Cr Depreciation Expense  $ 3,600  

    Cr Electricity Expense  $800  

    Cr Insurance Expense  $6,000  

    Cr Rent Expense  $20,000  

    Cr Salaries Expense  $15,000  

    Cr Supplies Expense  $1,300  

   Cr Interest expense  $5,000  

∞ this is your sign