The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 20Y9, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:
The Gorman Group End-of-Period Spreadsheet
For the Year Ended October 31, 20Y9
Adjusted Trial Balance
Account Title Dr. Cr.
Cash $17,700
Accounts Receivable 38,530
Supplies 6,020
Prepaid Insurance 13,000
Land 137,000
Buildings 493,000
Accumulated Depreciation-Buildings 160,400
Equipment 356,000
Accumulated Depreciation-Equipment 208,900
Accounts Payable 45,570
Salaries Payable 4,520
Unearned Rent 2,050
Common Stock 205,000
Retained Earnings 380,780
Dividends 34,200
Service Fees 649,860
Rent Revenue 6,860
Salaries Expense 465,890
Depreciation Expense-Equipment 25,300
Rent Expense 21,200
Supplies Expense 14,990
Utilities Expense 13,550
Depreciation Expense-Buildings 9,030
Repairs Expense 7,460
Insurance Expense 4,090
Miscellaneous Expense 6,980
1,663,940 1,663,940
Required:
1. Prepare an income statement.
Prepare a statement of owner's equity (no additional investments were made during the year.)
Prepare a balance sheet.
2. Journalize the entries that were required to close the accounts at October 31. For a compound transaction, if an amount box does not require an entry, leave it blank.
3. If the balance of Nicole Gorman, Capital had instead increased $115,000 after the closing entries were posted and the withdrawals remained the same, what would have been the amount of net income or net loss?