The trial balances of Orton Company follow with the accounts arranged in alphabetic order. Analyze the data and prepare (a) the adjusting entries and (b) the closing entries made by Orton Company.

Identify which of the following accounts would appear in a post-closing trial balance.

Accumulated Depreciation—Equipment    Owner’s Drawings
Depreciation Expense    Service Revenue
Interest Payable    Equipment


Solution
The following accounts would appear in a post-closing trial balance:   
 Accumulated Depreciation—Equipment   
 Interest Payable    
Equipment

The trial balances of Orton Company follow with the accounts arranged in alphabetic order. Analyze the data and prepare (a) the adjusting entries and (b) the closing entries made by Orton Company.

        Trial Balances   
    Unadjusted    Adjusted    Post-Closing
Accounts Payable    $10,000    $10,000    $10,000
Accounts Receivable    2,200    3,200    3,200
Accumulated Depreciation—Equipment    13,000    17,000    17,000
Advertising Expense    0    16,300    0
Cash    60,000    60,000    60,000
Depreciation Expense    0    4,000    0
Equipment    75,000    75,000    75,000
Owner’s Capital    82,200    82,200    102,400
Owner’s Drawings    11,000    11,000    0
Prepaid Advertising    17,800    1,500    1,500
Prepaid Rent    15,000    11,000    11,000
Rent Expense    0    4,000    0
Service Revenue    96,000    105,000    0
Supplies    3,200    700    700
Supplies Expense    2,000    4,500    0
Unearned Service Revenue    23,000    15,000    15,000
Salaries and Wages Expense    38,000    45,000    0
Salaries and Wages Payable    0    7,000    7,000
                                        


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