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Question

I have to prepare a post closing trial balance, and I don't have a clue how in the heck to do it. The adjusted trial balance is listed as follows: Cash $31,500 Accounts Recv. 75,200 Supplies 5,000 Equipment 199,900 Accumulated Deprec. $69,000 Accounts Payable 42,000 Capital 152,600 Drawing 30,000 Fees Earned 417,500 Salary Expense 249,500 Rent Expense 48,000 Depreciation Expense 26,000 Supplies Expense 7,500 Miscellaneous Expens 9,000 I cannot figure out the Post-Closing Trial Balance. Can someone please please help me?

Submitted: 24 days and 7 hours ago.
Category: Finance
Value: $15
Status: CLOSED
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Country/State/Province of question: VIRGINIA

Already Tried:
I am not sure how to figure out the post closing trail balance. I have tried for hours, and I just can't seem to get it to balance. I know that for the post closing trial balance, you only use the assets and liablilites and the capital. But I am still unable to get it to balance. Can someone please help?

Posted by RD 24 days and 6 hours ago.

Info Request

Can you check the figures again? I think there is an error of $500 in one of the numbers....

24 days and 6 hours ago.

Reply

Accounts Payable is $42,500

Posted by RD 24 days and 6 hours ago.

Answer

Link to soln

Soln

24 days and 6 hours ago.

Reply

I thought for the post-closing trail balances the only things that are suppose to be on there are the assets, liabilities, capital accounts, (which are all permanent accounts). How is drawings, and net income permanent accounts?

Accepted Answer

Drawings and net income(part of Capital account and gets transferred to Capital account via closing entry) are Balance sheet accounts and hence will be part of post closing trial balance.

Some people report the net income as increase in Capital account and drawing as reduction in capital account.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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Expert: RD
Pos. Feedback: 99.3 %
Accepts: 
Answered: 10/29/2009

Certified Public Accountant (CPA)

MBA, CPA

24 days and 6 hours ago.

Reply

I am totally confused because my professor which is a CPA has not explained that to us, and I am kind of leary of that. All of the post closing trial balances don't have the drawings associated with it or the net income.

Posted by RD 24 days and 6 hours ago.

Answer

They must be adjusted the Capital account balance by increasing it with net income and reducing it with the drawing amount.
In practical scenario- we keep the accounts as shown in the trial balance I posted earlier.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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