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Financial Statements and Closing Entries

The Gorman Group is a financial planning services firm owned and operated by Nicole Gorman. As of October 31, 20Y3, the end of the fiscal year, the accountant for The Gorman Group prepared an end-of-period spreadsheet, part of which follows:

Account Title	Dr.	Cr.
Cash	14,850
Accounts Receivable	32,320
Supplies	5,050
Prepaid Insurance	10,910
Land	115,000
Buildings	413,000
Accumulated Depreciation-Buildings		134,500
Equipment	298,000
Accumulated Depreciation-Equipment		175,200
Accounts Payable		38,230
Salaries Payable		3,790
Unearned Rent		1,720
Nicole Gorman, Capital		490,360
Nicole Gorman, Drawing	28,700
Service Fees		545,150
Rent Revenue		5,760
Salaries Expense	390,820
Depreciation ExpenseEquipment	21,200
Rent Expense	17,800
Supplies Expense	12,570
Utilities Expense	11,360
Depreciation ExpenseBuildings	7,580
Repairs Expense	6,260
Insurance Expense	3,430
Miscellaneous Expense	5,860
	1,394,710	1,394,710

Required:

1. Prepare an income statement.

Revenues:

Total revenues:

Expenses:

Total expenses:

Net income:

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. 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?

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