For each account listed, identify whether the account would appear on the post-closing trial balance. Indicate either yes or no.
17. Service Revenue
Post closing trial balance is prepared after recording the closing entries. It only reports the permanent account of the business.
Service revenue indicates the income generated by providing the services to the customers. It is temporary account, which is closed by recording closing entry, hence not reported in closing trial balance.
This problem continues the Canyon Canoe Company situation from Chapter 3.
1. Complete the worksheet at December 31, 2018 (optional). Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.
2. Prepare an income statement for the two months ended December 31, 2018. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.
3. Prepare a statement of retained earnings for the two months ended December 31, 2018.
4. Prepare a classified balance sheet (report form) at December 31, 2018. Assume the note payable is long-term.
5. Journalize and post the closing entries at December 31, 2018. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance for each account. Denote each closing amount as Clos. and each account balance as Balance.
6. Prepare a post-closing trial balance at December 31, 2018.
Ocean Breeze Associates accrued $8,500 of Service Revenue at December 31. Ocean Breeze Associates received $14,500 on January 15, including the accrued revenue recorded on December 31. Requirements 1. Record the adjusting entry to accrue Service Revenue. 2. Record the reversing entry. 3. Journalize the cash receipt.
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