the following unadjusted trial balance contains the accounts and balances of dylan delivery company as of…

the following unadjusted trial balance contains the accounts and balances of dylan delivery company as of december 31.\n1. use the following information about the company’s adjustments to complete a 10 - column work sheet.\n a. unrecorded depreciation on the trucks at the end of the year is $40,000.\n b. total amount of accrued interest expense at year - end is $6,000.\n c. cost of unused supplies still available at year - end is $2,000.\n2. (a) prepare the year - end closing entries for this company. (b) determine the capital amount to be reported on its year - end balance sheet. note: the s. dylan, capital account balance was $307,000 on december 31 of the prior year.\n\nunadjusted trial balance\naccount title debit credit\ncash $ 16,000\naccounts receivable 34,000\nsupplies 5,000\ntrucks 350,000\naccumulated depreciation—trucks $ 80,000\nland 160,000\naccounts payable 24,000\ninterest payable 5,000\nlong - term notes payable 100,000\ns. dylan, capital 307,000\ns. dylan, withdrawals 34,000\ndelivery revenue 263,000\ndepreciation expense—trucks 40,000\nsalaries expense 110,000\nsupplies expense 15,000\ninterest expense 5,000\nrepairs expense 10,000\ntotals $779,000 $779,000\n\nuse the may 31 fiscal year - end information from the following ledger accounts (assume that all accounts have normal balances) to (a) prepare closing journal entries and (b) post those entries to ledger accounts.\n\ngeneral ledger\nm. muncel, capital acct. no. 301\ndate pr debit credit balance\nmay 31 g2 40,000\nm. muncel, withdrawals acct. no. 302\ndate pr debit credit balance\nmay 31 g2 22,000\nservices revenue acct. no. 403\ndate pr debit credit balance\nmay 31 g2 76,000\ndepreciation expense acct. no. 603\ndate pr debit credit balance\nmay 31 g2 15,000\nsalaries expense acct. no. 622\ndate pr debit credit balance\nmay 31 g2 20,000\ninsurance expense acct. no. 637\ndate pr debit credit balance\nmay 31 g2 4,400\nrent expense acct. no. 640\ndate pr debit credit balance\nmay 31 g2 8,400\nincome summary acct. no. 901\ndate pr debit credit balance

the following unadjusted trial balance contains the accounts and balances of dylan delivery company as of december 31.\n1. use the following information about the company’s adjustments to complete a 10 - column work sheet.\n a. unrecorded depreciation on the trucks at the end of the year is $40,000.\n b. total amount of accrued interest expense at year - end is $6,000.\n c. cost of unused supplies still available at year - end is $2,000.\n2. (a) prepare the year - end closing entries for this company. (b) determine the capital amount to be reported on its year - end balance sheet. note: the s. dylan, capital account balance was $307,000 on december 31 of the prior year.\n\nunadjusted trial balance\naccount title debit credit\ncash $ 16,000\naccounts receivable 34,000\nsupplies 5,000\ntrucks 350,000\naccumulated depreciation—trucks $ 80,000\nland 160,000\naccounts payable 24,000\ninterest payable 5,000\nlong - term notes payable 100,000\ns. dylan, capital 307,000\ns. dylan, withdrawals 34,000\ndelivery revenue 263,000\ndepreciation expense—trucks 40,000\nsalaries expense 110,000\nsupplies expense 15,000\ninterest expense 5,000\nrepairs expense 10,000\ntotals $779,000 $779,000\n\nuse the may 31 fiscal year - end information from the following ledger accounts (assume that all accounts have normal balances) to (a) prepare closing journal entries and (b) post those entries to ledger accounts.\n\ngeneral ledger\nm. muncel, capital acct. no. 301\ndate pr debit credit balance\nmay 31 g2 40,000\nm. muncel, withdrawals acct. no. 302\ndate pr debit credit balance\nmay 31 g2 22,000\nservices revenue acct. no. 403\ndate pr debit credit balance\nmay 31 g2 76,000\ndepreciation expense acct. no. 603\ndate pr debit credit balance\nmay 31 g2 15,000\nsalaries expense acct. no. 622\ndate pr debit credit balance\nmay 31 g2 20,000\ninsurance expense acct. no. 637\ndate pr debit credit balance\nmay 31 g2 4,400\nrent expense acct. no. 640\ndate pr debit credit balance\nmay 31 g2 8,400\nincome summary acct. no. 901\ndate pr debit credit balance

Answer

Explanation:

Step1: Calculate net income for Dylan Delivery Company

Net income = Delivery revenue - (Depreciation expense—Trucks + Salaries expense + Supplies expense + Interest expense+ Repairs expense) Net income = $263,000-(40,000 + 110,000+15,000 + 5,000+10,000)=$83,000

Step2: Prepare closing entries for Dylan Delivery Company

Closing entry 1: Close revenue account

Debit: Delivery revenue $263,000 Credit: Income Summary $263,000

Closing entry 2: Close expense accounts

Debit: Income Summary $180,000 Credit: Depreciation expense—Trucks $40,000 Credit: Salaries expense $110,000 Credit: Supplies expense $15,000 Credit: Interest expense $5,000 Credit: Repairs expense $10,000

Closing entry 3: Close Income Summary to Capital

Debit: Income Summary $83,000 Credit: S. Dylan, Capital $83,000

Closing entry 4: Close withdrawals to Capital

Debit: S. Dylan, Capital $34,000 Credit: S. Dylan, Withdrawals $34,000

Step3: Calculate capital amount for Dylan Delivery Company

Beginning capital = $307,000 Add net - income = $83,000 Less withdrawals = $34,000 Ending capital = $307,000 + 83,000-34,000=$356,000

Step4: Prepare closing entries for M. Muncel

Closing entry 1: Close revenue account

Debit: Services Revenue $76,000 Credit: Income Summary $76,000

Closing entry 2: Close expense accounts

Debit: Income Summary $47,800 Credit: Salaries Expense $20,000 Credit: Insurance Expense $4,400 Credit: Rent Expense $8,400 Credit: Depreciation Expense $15,000

Closing entry 3: Close Income Summary to Capital

Net income = $76,000 - 47,800=$28,200 Debit: Income Summary $28,200 Credit: M. Muncel, Capital $28,200

Closing entry 4: Close withdrawals to Capital

Debit: M. Muncel, Capital $22,000 Credit: M. Muncel, Withdrawals $22,000

Answer:

For Dylan Delivery Company: Closing entries:

  1. Debit: Delivery revenue $263,000; Credit: Income Summary $263,000
  2. Debit: Income Summary $180,000; Credit: Depreciation expense—Trucks $40,000, Salaries expense $110,000, Supplies expense $15,000, Interest expense $5,000, Repairs expense $10,000
  3. Debit: Income Summary $83,000; Credit: S. Dylan, Capital $83,000
  4. Debit: S. Dylan, Capital $34,000; Credit: S. Dylan, Withdrawals $34,000 Capital amount to be reported on balance - sheet: $356,000 For M. Muncel: Closing entries:
  5. Debit: Services Revenue $76,000; Credit: Income Summary $76,000
  6. Debit: Income Summary $47,800; Credit: Salaries Expense $20,000, Insurance Expense $4,400, Rent Expense $8,400, Depreciation Expense $15,000
  7. Debit: Income Summary $28,200; Credit: M. Muncel, Capital $28,200
  8. Debit: M. Muncel, Capital $22,000; Credit: M. Muncel, Withdrawals $22,000