FINALS ACTIVITY NO .

2
COMPLETING THE ACCOUNTING CYCLE

Problem No. 1: Preparing the closing entries and post-closing trial blance (15 points)

Listed below are the accounts taken from the December 31, 2020 adjusted trial balance of
Aristotle Go Publishers:

Accounts Receivable P 260,000 Interest Payable P

40,000
Supplies Expense 710,000 Cash 160,000
Salaries Expense 2,270,000 Repairs Expense 10,000
Printing Revenues 8,130,000 Accounts Payable 190,000
Prepaid Insurance 320,000 Telephone Expense 20,000
Depreciation Expense 250,000 Utilities Expense 80,000
Supplies 160,000 Unearned Printing Revenues 210,000
Salaries Payable 310,000 Interest Expense 300,000
Printing Equipment 5,520,000 Go, Capital 340,000
Prepaid Advertising 70,000 Notes Payable 2,500,000
Go, Withdrawals 1,500,000 Miscellaneous Expense 90,000

Requirements:

1. Prepare the closing entries. (10 points)

2. Prepare the post-closing trial balance. (5 points)

Ref.
Date Account name Debit Credit
No.

12/31/202
CJE 1 To close revenue accounts
0
    Printing revenue 8,130,000  
    Income and expense summary   8,130,000

12/31/202
CJE 2 To close expense accounts to owner's equity
0
    Income and expense summary 3, 730,000
    Supplies Expense 710,000
    Salaries Expense 2,270,000
    Miscellaneous Expense 90,000
    Telephone Expense 20,000
Repairs Expense 10,000
Utilities Expense 80, 000
    Interest expense 300,000
    Depreciation expense 250,000

12/31/202
CJE 3 To close the income and expense summary account
0
    Income and expense summary  
4,400,000
    Go, capital  
4,400,000

12/31/202
CJE 4 To close the owner's withdrawal
0
     Go, capital 1,500  
    Go, Withdrawals   1,500

POST CLOSING TRIAL BALANCE

ACCOUNT NAME ADJUSTED TRIAL CLOSING JOURNAL POST- CLOSING TRIAL

BALANCE ENTRIES BALANCE
Debit Credit Debit Credit Debit Credit
Cash 160,000 160,000
Accounts receivable 260,000 260,000
Prepaid Insurance 320,000 320,000
Supplies 160,000 160,000
Printing Equipment 5,520,000 5,520,000
Prepaid Advertising 70,000 70,000
Salaries Payable 310,000 310,000
Accounts Payable 190,000 190,000
Notes Payable 2,500,000 2,500,000
Unearned Printing 210,000 210,000
Revenues
Go, Capital 340,000 1,500,000 4,400,000 3,240,000
Go, Withdrawals 1,500,000 1,500,000
Printing revenue 8,130,000 8,130,000
Supplies Expense 710,000 710,000
Repairs Expense 10,000 10,000
Telephone Expense 20,000 20,000
Utilities Expense 80,000 80,000
Salaries Expense 2,270,000 2,270,000
Interest Expense 300,000 300,000
Depreciation 250,000 250,000
Expense
Miscellaneous 90,000 90,000
Expense
Income and expense 3,730,000 3,730,000
summary
Sub-total 11,720,000 11,720,000 17,760,000 17,760,000 6,490,000 6,490,000

Problem No. 2: Preparing reversing entries (10 points)

Some of the adjusting entries of the Warlito Company on December 31, 2020 is presented
below:

AJE Date Account and particulars Debit Credit

No.
AJE 1 12/31/2020 Prepaid insurance 25,000
Insurance expense 25,000
To record unexpired insurance at year-
end

AJE 2 12/31/2020 Accrued interest receivable 17,000

Interest income 17,000
To record accrued interest at year-end

AJE 3 12/31/2020 Office supplies expense 50,000

Office supplies 50,000
To record office supplies used
AJE 4 12/31/2020 Depreciation expense 125,000
Accumulated depreciation 125,000
To record depreciation at year-end

AJE 5 12/31/2020 Rent Revenues 80,000

Unearned Rent Revenues 80,000
To record liability on unearned rent

Required:

For each adjustment, prepare the corresponding reversing entry, if any. If the adjustment is
not allowed to be reversed, indicate N/A.

REVERSING JOURNAL ENTRY

AJE Date Account and particulars Debit Credit

No.
AJE 1 12/31/2020 Insurance expense 25,000
Prepaid Insurance 25,000
To record unexpired insurance at
year-end

AJE 2 12/31/2020 Interest income 17,000

Accrued interest receivable 17,000
To record accrued interest at
year-end

AJE 3 12/31/2020 Office supplies 50,000

Office supplies expense 50,000
To record office supplies used

NOT APPLICABLE/ NA

AJE 5 12/31/2020 Unearned Rent Revenues 80,000

Rent Revenues 80,000
To record liability on unearned
rent