Ex. 5.

a.
WILDERNESS GUIDE SERVICES LIMITED
General Journal
December 31, 2009
(1)
Dec. 31 Guide Revenue Earned 102,000
Income Summary 102,000
To close Guide Revenue Earned.

(2)
31 Income Summary 105,000
Salary Expense 87,500
Camping Supply Expense 1,200
Insurance Expense 9,600
Depreciation Expense: Equipment 5,000
Interest Expense 1,700
To close all expense accounts.

(3)
31 Retained Earnings 3,000
Income Summary 3,000
To transfer loss incurred in 2009 to the
Retained Earnings account ($102,000 - $105,000 =
$3,000 loss).

(4)
31 Retained Earnings 1,000
Dividends 1,000
To transfer dividends declared in 2009 to the
Retained Earnings account.
Ex. 5.7 a. Counseling Revenue………………………………………………..
225,000
Income Summary…………………………………………. 225,000
To close counseling revenue earned.
Close all expenses to the Income summary account:
Income Summary………………………………………………..170,400
Advertising Expense………………………………… 1,800
Salaries Expense……………………………………….. 94,000
Office Supplies Expense………………………………… 1,200
Utilities Expense……………………………………….. 850
Malpractice Insurance Expense……………………….. 6,000
Office Rent Expense………………………………….. 24,000
Continuing Education Expense………………………… 2,650
Depreciation Expense: Fixtures……………………….. 4,500
Miscellaneous Expense……………………………… 6,000
Income Taxes Expense…………………………………… 29,400
To close all expense accounts.
Income Summary…………………………………………………54,600
Retained Earnings………………………………………. 54,600
To transfer profit earned in 2009 ($225,000 -
$170,400) to Retained Earnings.

Retained Earnings……………………………………………… 6,000

Dividends…………………………………………….. 6,000
To close dividends declared in 2009 to Retained
Earnings.

b. Retained Earnings, January 1, 2009 $ 92,000

Plus: Profit 54,600
$ 146,600
Less: Dividends Declared in 2009 (6,000)
Retained Earnings, December 31, 2009 $ 140,600
Ex. 5.8 a. Consulting Revenue - Individual Clients…………….. 40,000
Consulting Revenue - Corporate Clients…………….. 160,000
Income Summary…………………………………………. 200,000
To close revenue accounts to income summary.
Income Summary………………………………………………..275,000
Advertising Expense………………………………… 16,000
Depreciation Expense: Computers...………….. 24,000
Rent Expense……………………………………. 9,600
Office Supplies Expense………………………… 4,400
Travel Expense………………………………….. 57,800
Utilities Expense………………………………… 3,300
Telephone and Internet Expense……………… 1,900
Salaries Expense……………………………….. 155,500
Interest Expense……………………………….. 2,500
To close expense accounts to income summary.
Retained Earnings………………………………………. 75,000
Income Summary………………………………… 75,000
To transfer a loss for the period to retained earnings.

Retained Earnings……………………………………………… 25,000

Dividends…………………………………………….. 25,000
To close dividends to retained earnings.

b. Retained Earnings, (January 1, 2009)………...…… $ 300,000

Less: Loss in 2009………………………………. (75,000)
Dividends in 2009………………………………. (25,000)
Retained Earnings, December 31, 2009 $ 200,000

Ex. 5.9 a. Insurance Expense………………………………………………………. 600

Unexpired Insurance……………………………………………. 600
To record insurance expense for December.
b. Income Summary……………………………………………………….. 3,000
Insurance Expense………………………………………………. 3,000
To close Insurance Expense (5 months) to Income
Summary.
c. No, the dollar amounts are not the same in the adjusting and closing entries.
The accounts are adjusted monthly; therefore the adjusting entry reflects
insurance expense for one month ($600). The books are closed annually. By
December 31, five months’ insurance expense ($3,000) has been recognized for
the period August through December.