Problem: The adjusted trial balance of Lanza Company at the end of its fiscal year is: LANZA COMPANY

Adjusted Trial Balance July 31, 2005 No. 101 112 157 167 201 208 301 306 404 429 711 720 732 Account Titles Cash Accounts Receivable Equipment Accumulated Depreciation Accounts Payable Unearned Rent Revenue C. J. Lanza, Capital C. J. Lanza, Drawing Commission Revenue Rent Revenue Depreciation Expense Salaries Expense Utilities Expense Debits $14,840 8,780 15,900 Credits

$5,400 4,220 1,800 45,200 16,000 67,000 6,500 4,000 55,700 14,900 $130,120 $130,120

Instructions (a) Prepare the closing entries using page J15. (b) Post to C.J. Lanza, Capital and No. 350 Income Summary accounts. ( use the three-column form.) (c) Prepare a post-closing trial balance at July 31.

Solution: (a) LANZA COMPANY Closing Journal Entries No. 1 Date July 31 Account Titles and Explanations Commission Revenue Rent Revenue Income Summary ( To close revenue accounts) Income Summary Depreciation Expense Salaries Expense Utilities Expense ( To close expense accounts) C. J. Lanza, Capital Income Summary (74,600-73,500) (To close income summary account) C. J. Lanza, Capital C. J. Lanza, Drawing ( To close drawing account) Ref. Debit 67,000 6,500 74,600 4,000 55,700 14,900 1,100 1,100 16,000 16,000 J15 Credit 73,500

July 31

3 4

July 31 July 31

(b)

LANZA COMPANY Ledger Accounts (Three- Column Form) Income Summary No. 350 Credit 73,500 1,100 Balance 73,500 (1,100) 0 No. 301 Credit 45,200 Balance 45,200 44,100 28,100

Date July 31 July 31 July 31

Explanation

Ref. J15 J15 J15

Debit 74,600

C. J. Lanza, Capital Date July 31 July 31 July 31 Explanation Balance Ref. J15 J15 Debit

1,100 16,000

(c)

LANZA COMPANY Post-Closing Trial Balance July 31, 2005 Account Titles Cash Accounts Receivable Equipment Accumulated Depreciation Accounts Payable Unearned Rent Revenue C. J. Lanza, Capital (adjusted) Debits $14,840 8,780 15,900 Credits

No. 101 112 157 167 201 208 301

$5,400 4,220 1,800 28,100 $39,520 $39,520