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P4-3A The completed financial statement columns of the worksheet for Woods Company are shown below.


The completed financial statement columns of the worksheet for Woods Company are shown below.
For the Year Ended December 31, 2008
Income Statement
Balance Sheet

Acc. No.
Account Titles Dr. Cr. Dr. Cr.
101 Cash 8,200
112 Accounts Receivable 7,500
130 Prepaid Insurance 1,800
157 Equipment 28,000
167 Accumulated Depreciation 8,600
201 Accounts Payable 11,700
212 Salaries Payable 3,000
311 Common Stock 20,000
320 Retained Earnings 14,000
332 Dividends 7,200
400 Service Revenue 44,000
622 Repair Expense 5,400
711 Depreciation Expense 2,800
722 Insurance Expense 1,200
726 Salaries Expense 35,200
732 Utilities Expense 4,000

Totals 48,600 44,000 52,700 57,300
Net Loss


Prepare an income statement, a retained earnings statement, and a classified balance sheet. No additional common stock was issued during 2008. (If there is a net loss, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45) to enter the amount in Income statement. Enter all other amounts as positive amounts and subtract where necessary. List assets in order of liquidity and all other amounts from largest to smallest e.g. 10, 5, 3, 2.)
Income Statement
For the Year Ended December 31, 2008
Service revenueUtilities expenseDepreciation expenseSalaries expenseRepair expenseInsurance expense $
Service revenueUtilities expenseRepair expenseDepreciation expenseInsurance expenseSalaries expense $
Salaries expenseRepair expenseService revenueUtilities expenseDepreciation expenseInsurance expense
Utilities expenseRepair expenseSalaries expenseInsurance expenseService revenueDepreciation expense
Depreciation expenseUtilities expenseRepair expenseSalaries expenseService revenueInsurance expense
Insurance expenseRepair expenseDepreciation expenseUtilities expenseSalaries expenseService revenue

Total expenses

Net income (loss) $

Retained Earnings Statement
For the Year Ended December 31, 2008
Additional investment by ownerNet lossRetained earnings, January 1Retained earnings, December 31Dividends $
Less: Net lossDividendsRetained earnings, January 1Additional investment by ownerRetained earnings, December 31 $
DividendsRetained earnings, December 31Retained earnings, January 1Net lossAdditional investment by owner

DividendsRetained earnings, December 31Net lossAdditional investment by ownerRetained earnings, January 1 $

Balance Sheet
December 31, 2008
Current Assets
EquipmentPrepaid insuranceSalaries payableCashRetained earningsAccounts receivableAccumulated depreciationCommon stockAccounts payable $
Retained earningsAccumulated depreciationEquipmentAccounts payableSalaries payableCommon stockAccounts receivableCashPrepaid insurance
Retained earningsEquipmentCommon stockPrepaid insuranceAccounts receivableCashAccumulated depreciationAccounts payableSalaries payable

Total current assets
Property, plant and equipment
Retained earningsCashSalaries payableAccumulated depreciationEquipmentCommon stockAccounts payablePrepaid insuranceAccounts receivable $
Less: EquipmentAccumulated depreciationCommon stockPrepaid insuranceCashSalaries payableRetained earningsAccounts receivableAccounts payable

Total assets $

Liabilities and Stockholders' Equity
Current liabilities
Accumulated depreciationAccounts payablePrepaid insuranceAccounts receivableEquipmentCommon stockCashSalaries payableRetained earnings $
Retained earningsCashSalaries payableCommon stockAccounts payablePrepaid insuranceAccumulated depreciationEquipmentAccounts receivable

Total current liabilities
Stockholders' Equity
Accounts payableAccumulated depreciationCashEquipmentPrepaid insuranceRetained earningsAccounts receivableCommon stockSalaries payable $
Salaries payableAccumulated depreciationEquipmentPrepaid insuranceAccounts receivableCashCommon stockAccounts payableRetained earnings

Total stockholders' equity

Total liabilities and stockholders' equity $

Prepare the closing entries. (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2.)
Date Description/Account Debit Credit
Dec. 31 DividendsDepreciation expenseRetained earningsUtilities expenseService revenueInsurance expenseIncome summaryRepair expenseSalaries expense
DividendsDepreciation expenseRetained earningsRepair expenseIncome summaryUtilities expenseInsurance expenseService revenueSalaries expense
(To close revenue account.)
Dec. 31 Salaries expenseRepair expenseIncome summaryRetained earningsService revenueDepreciation expenseInsurance expenseUtilities expenseDividends
Income summaryDividendsService revenueRetained earningsUtilities expenseSalaries expenseInsurance expenseRepair expenseDepreciation expense
Utilities expenseService revenueInsurance expenseSalaries expenseRepair expenseIncome summaryDividendsRetained earningsDepreciation expense
Utilities expenseRetained earningsDividendsRepair expenseSalaries expenseIncome summaryInsurance expenseService revenueDepreciation expense
DividendsUtilities expenseIncome summarySalaries expenseRepair expenseInsurance expenseRetained earningsDepreciation expenseService revenue &$
DividendsRetained earningsRepair expenseInsurance expenseService revenueIncome summaryDepreciation expenseSalaries expenseUtilities expense
(To close expense accounts.)
Dec. 31 Repair expenseRetained earningsDepreciation expenseInsurance expenseSalaries expenseUtilities expenseDividendsService revenueIncome summary
Utilities expenseIncome summaryDividendsService revenueRepair expenseRetained earningsDepreciation expenseInsurance expenseSalaries expense
(To close net income to retained earnings.)
Dec. 31 Retained earningsService revenueInsurance expenseUtilities expenseRepair expenseDividendsIncome summaryDepreciation expenseSalaries expense
Retained earningsDividendsService revenueInsurance expenseRepair expenseSalaries expenseIncome summaryUtilities expenseDepreciation expense
(To close dividends to capital.)

Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350. (Enter amounts in the order of journal entries passed in the previous question.)
Retained Earnings Repair Expense
12/31 12/31 Bal. 12/31 Bal. 12/31
12/31 Bal. Depreciation Expense
12/31 Bal. 12/31
12/31 Bal. 12/31 Insurance Expense
12/31 Bal. 12/31
Income Summary
12/31 12/31 Salaries Expense
12/31 12/31 Bal. 12/31

Utilities Expense
Service Revenue
12/31 Bal. 12/31
12/31 12/31 Bal.

Prepare a post-closing trial balance. (If answer is zero, please enter 0. Do not leave any fields blank.)
Post-Closing Trial Balance
December 31, 2008
Trial Balance

Account Titles Dr. Cr.
Cash $ $
Accounts Receivable
Prepaid Insurance
Accumulated Depreciation
Accounts Payable
Salaries Payable
Common Stock
Retained earnings


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