R
Professional Fees Earned $57,000
Rent Earned $6,600
Dividends Earned $1,500
Interest Earned $1,120
Gross Revenue $66,220
E
Depreciation expense - Building $2,000
Depreciation expense - Equipment $1,000
Wage Expense $17,500
Interest expense $5,200
Insurance expense $1,425
Rent expense $1,800
Supplies expense $900
Postage expense $310
Property taxes expense $3,825
Repairs expense $1,579
Telephone expense $921
Utilities expense $1,820
Total Expenses $38,280
Net Operating Income $27,940
Financial Statements in U.S. Dollars
GIOVANNI COMPANY
INCOME STATEMENT
For the Month Ended December 31,2011
J. Giovanni, Captial 12/31/2010 $61,800.00
J. Giovanni's investment $30,000.00
Add: Net Income $27,940.00
Total $119,740.00
Less: J. Giovanni, Withdrawals ($14,500.00)
Total Owner's Equity
$105,240.00
GIOVANNI COMPANY
OWNER'S EQUITY STATEMENT
For the Month Ended December 31,2011
Balance Sheet
For Year Ending December 31, 2011
ASSETS LIABILITIES
Current Assets Current Liabilities
Cash $6,400 Accounts payable $2,500
Short-term investment 10,200 Interest payable 1,400
Supplies 3,600 Rent payable 200
Prepaid Insurance 800 Wages payable 1,180
Property taxes payable 2,330
Unearned professional fees 650
Total Current Assets $21,000 Total Current Liabilities $8,260
Fixed Assets Long-term Liabilities
Long-term notes payable $32,000
Land 28,500
Buildings 90,000 Total Long-term Liabilities $32,000
(less accumulated depreciation) (9,000)
Equipment 18,000 Equity
(less accumulated depreciation) (3,000) J. Giovanni, Capital $105,240
Total Net Fixed Assets $124,500 Total Owner's Equity $105,240
TOTAL ASSETS $145,500 TOTAL LIABILITIES & EQUITY $145,500
GIOVANNI COMPANY
Return on Assets Ratio = 2.35%
Debt Ratio= 2.76%
Profit Margin Ratio= 4.21%
Current Ratio= 2.54%
Summary of Closing Process
Step 1 Close credit balances in revenue accounts to Income Summary
Dr Cr
12/31/2011 Professional Fees Earned $57,000
Rent Earned $6,600
Dividends Earned $1,500
Interest Earned $1,120
Income Summary $66,220
Step 2 Close debit balances in expense accounts to Income Summary
Dr Cr
12/31/2011 Income Summary $38,280
Depreciation expense - Building $2,000
Depreciation expense - Equipment $1,000
Wage Expense $17,500
Interest expense $5,200
Insurance expense $1,425
Rent expense $1,800
Supplies expense $900
Postage expense $310
Property taxes expense $3,825
Repairs expense $1,579
Telephone expense $921
Utilities expense $1,820
Step 3 Close Income Summary to Owner's Captial
Dr Cr
12/31/2011 Income Summary $91,800
J. Giovanni's, Captial $91,800
Step 4 Close Withdrawals Accounts to Owner's Capital
Dr Cr
12/31/2011 J. Giovanni's, Capital $14,500
J. Giovanni's, Withdrawals $14,500
Income Summary
$38,280 $66,220
$27,940
J. Giovanni, Capital
$14,500 $91,800
$27,940
$105,240
Post-Closing Trial Balance
Dr
Cr
101
Cash $6,400
104
Short-term Investment $10,200
126
Supplies $3,600
128
Prepaid Insurance $800
167
Equipment $18,000
168
Accumulated depreciation- Equipment $3,000
173
Building $90,000
174
Accumulated depreciation- Building $9,000
183
Land $28,500
201
Accounts payable $2,500
203
Interest payable $1,400
208
Rent payable $200
210
Wages payable $1,180
213
Property taxes payable $2,330
233
Unearned professional fees $650
251
Long-term notes payable $32,000
301
J. Giovanni, Capital $105,240
302
j. Giovanni, Withdrawal
401
Professional fees earned
406
Rent earned
407
Dividends earned
409
Interest earned
606
Depreciation expense - Building
612
Depreciation expense - Equipment
623
Wages expense
633
Interest expense
637
Insurance expense
640
Rent expense
652
Supplies expense
682
Postage expense
683
Property taxes expense
684
Repairs expense
688
Telephone expense
690
Utilities expense
Totals
$157,500
$157,500
J. Giovanni
Post-Closing Trial Balance
December 31,2011
