Practice Problems

Demonstration problem

This problem involves using a work sheet for Green Hills Riding Stable, Incorporated, for the month ended 2010 July 31, and performing the closing process. The trial balance for Green Hills Riding Stable, Incorporated, as of 2010 July 31, was as follows:

GREEN HILLS RIDING STABLE, INCORPORATED

Trial Balance

2010 July 31

Acct. No.	Account Title	Debits	Credits
100	Cash	$ 10,700
103	Accounts Receivable	8,100
130	Land	40,000
140	Buildings	24,000
200	Accounts Payable		$ 1,100
201	Notes Payable		40,000
300	Capital Stock		35,000
310	Retained Earnings, 2010 July 1		3,100
320	Dividends	1,000
402	Horse Boarding Fees Revenue		4,500
404	Riding Lesson Fees Revenue		3,600
507	Salaries Expense	1,400
513	Feed Expense	1,100
540	Interest Expense	200
568	Miscellaneous Expense	800
		$ 87,300	87,300

Depreciation expense for the month is USD 200. Accrued salaries on July 31 are USD 300.

a. Prepare a 12-column work sheet for the month ended 2010 July 31.

b. Journalize the adjusting entries.

c. Journalize the closing entries.

Source: Textbook Equity, https://learn.saylor.org/pluginfile.php/41229/mod_resource/content/8/AccountingPrinciples.pdf
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