Answer:
Services revenue: 44,000 debit
Income Summary: 44,000 credit
--to finalize revenue accounts--
Income Summary: 33,100 debit
Depreciation expense—Equipment: 3,000 credit
Salaries expense: 22,000 credit
Insurance expense: 2,500 credit
Rent expense: 3,400 credit
Supplies expense: 2,200 credit
--to finalize expense accounts--
Income Summary: 7,000 debit
A. Cruz, Withdrawals: 7,000 credit
--to finalize withdrawals account--
Income Summary: 3,900 debit
A. Cruz, Capital Account: 3,900 credit
--to adjust Income Summary against Cruz’s capital account--
Cash: 19,000
Supplies: 13,000
Prepaid insurance: 3,000
Equipment: 24,000
Accumulated depreciation—Equipment: 7,500
A. Cruz, Capital: 51,500
Totals: 59,000 59,000
Explanation:
To complete the accounting cycle, we utilize the income summary to close off revenues, expenses, and withdrawals accounts. The resulting balance will be allocated to Cruz Capital Account.
Income summary balance: 44,000 - 33,100 - 7,000 = 44,000 - 40,100 = 3,900
Finally, we will prepare the trial balance, recognizing that assets carry a debit balance while liabilities and equity are credited.
This verification ensures that everything aligns with Debit = Credit.
