Accounting homework exercise help!!!

Posted on 2013-11-22 16:19:00 in Accounting by SDRAKE

I am having the hardest time in the world understanding depreciation and how it affects the trial balance. All I know is depreciation is a liability that turns into an asset (I may be wrong)



I am doing this homework exercise and am stuck. Need help. If you could do the whole problem for me, GREAT!!! This homework is being done on my own time, it's not an actual assignment. I just know if I understand this problem then I will be ready for the test coming up. And this dumb book doesn't have the answers.





Refer to the trial balance below to respond to the following items:



a) Prepare all necessary closing entries at Dec 31, 2011

b) Prepare all after closing trial balance dated Dec 31, 2011



Wilderness Guide Services

Adjusted Trial Balance

December 31, 2011



Cash $12,200

Accounts Receivable 31,000

Camping Supplies 7,900

UnExpired insurance policies 2,400

Equipment 70,000

Accumulated depreciation: equp $60,000

Notes Payable (due 4/1/12) 18,000

Accounts Payable 9,500

Capital Stock 25,000

Retained Earnings 15,000

Dividends 1,000

Guide Revenue earned 102,000

Salary Expense 87,500

Camping Supply Expense 1,200

Insurance expense 9,600

Depreciation expense: equip 5,000

Interest expense 1,700



Total $229,500 $229,500

Honestly I don't know what to do. What do they mean prepare the necessary closing entries?

Will I make an income statement or retained earnings statement?

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