Question 1
Foxy Investigative Services is an investigative services firm that is owned and operated by Shirley Vickers. On November 30, 2018, the end of the fiscal year, the accountant for Foxy Investigative Services prepared an end-of-period spreadsheet, a part of which follows:
Foxy Investigative ServicesEnd-of-Period SpreadsheetFor the Year Ended November 30, 2018
~Adjusted Trial BalanceAccount Title~Dr.Cr.
~
Cash~23,000
Accounts Receivable~71,800
Supplies~4,500
Prepaid Insurance~2,500
Building~444,000
Accumulated Depreciation-Building~
44,600Accounts Payable~
11,200Salaries Payable~
2,900Unearned Rent~
1,500Common Stock~
80,000Retained Earnings~
293,200Dividends~11,500
Service Fees~
719,450Rent Revenue~
11,500Salaries Expense~525,000
Rent Expense~46,000
Supplies Expense~10,500
Depreciation Expense-Building~7,400
Utilities Expense~7,350
Repairs Expense~2,500
Insurance Expense~2,300
Miscellaneous Expense~6,000
~1,164,3501,164,350
Required:1.A.Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles.B.Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.C.Prepare a balance sheet as of November 30, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. You will not need to enter colons (:) or the word “Less” on the balance sheet; they will automatically insert where necessary. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names. For those boxes in which you must enter subtracted or negative numbers use a minus sign.2.Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.3.If Retained Earnings had instead decreased $40,000 after the closing entries were posted, and the dividends remained the same, what would have been the amount of net income or net loss? If required, use a minus sign to indicate a net loss.
Chart of Accounts
CHART OF ACCOUNTSFoxy Investigative ServicesGeneral Ledger
ASSETS11Cash12Accounts Receivable13Supplies14Prepaid Insurance17Building18Accumulated Depreciation-Building
LIABILITIES21Accounts Payable22Salaries Payable23Unearned Rent
EQUITY31Common Stock32Retained Earnings33Dividends34Income Summary
REVENUE41Service Fees42Rent Revenue
EXPENSES51Salaries Expense52Rent Expense53Supplies Expense54Depreciation Expense-Building55Utilities Expense56Repairs Expense57Insurance Expense59Miscellaneous Expense
Labels and Amount Descriptions
Labels
Current assets
Current liabilities
Expenses
For the Year Ended November 30, 2018
November 30, 2018
Property, plant, and equipment
Revenues
Amount Descriptions
Change in retained earnings
Dividends
Net income
Net loss
Retained earnings, December 1, 2017
Retained earnings, November 30, 2018
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and stockholders’ equity
Total property, plant, and equipment
Total revenues
Total stockholders’ equity
Income Statement
1A. Prepare an income statement for the year ended November 30, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement. Refer to the Chart of Accounts for exact wording of account titles.
Foxy Investigative Services
Income Statement
Retained Earnings Statement
1B. Prepare a retained earnings statement for the year ended November 30, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items. Refer to the Chart of Accounts for exact wording of account titles. Refer to the lists of Labels and Amount Descriptions for exact wording of the answer choices for text entries other than account names.